00:00Let's talk about crypto arbitrage, right?
00:03So how traders extract risk neutral profit and why arbitrage is really dominating the crypto markets right now.
00:12Crypto trading has definitely evolved as all things really look like the old model, which was simple,
00:19where you predict direction and you risk your capital and hope that you are right is no longer the case,
00:26right?
00:26The modern kind of framework is a little bit different where you're capturing inefficiency
00:32and you're actually hedging risk and locking in profits, which really is in simple terms what arbitrage entails, right?
00:41So institutions or prop firms or professional market makers don't just rely on guessing the price direction
00:48that actually harvest spreads, which are tiny structural price errors across different exchanges.
00:56Thousands of times per day using bots and retail traders historically can't compete
01:05because obviously those spreads disappear in seconds and data tends to be fragmented
01:10between the centralized exchanges and the DEXs, monitoring, requiring constant attention, execution, timing,
01:18measuring more than analysis as well.
01:20But at the end of the day, now you have all these tools, right, that have pretty much changed all
01:25that
01:26in terms of just giving you infrastructure that you can now work to extract the value you can find
01:33with arbitrage trading, such tools like arbitrage scanner, and I'll be touching on some of those things today.
01:42So crypto arbitrage, for those that are new to it, you just have different exchanges.
01:46For example, the BTC price on one exchange is $1,000, $100,000, let's say, and then on another exchange,
01:53it's $100,500, right?
01:55So you try to make a trade where you're buying on the first exchange, you sell on the other exchange,
02:03you wait for the convergence, and you close the positions, and arbitrage has definitely exploded
02:10because in crypto, you have that opportunity where you have centralized exchanges, decentralized exchanges,
02:17automated market makers, you've got all kinds of futures, perpetual markets, funding mechanisms,
02:24cross-chain liquidity issues, listing delays, oracle lags that really just give you an opportunity to do arbitrage this way.
02:33So if you want to get started with arbitrage scanner, which is the tool I like to use, check the
02:38link in the description.
02:39At the end of the day, you just need to be able to understand that there are three essentially different
02:44types of arbitrage.
02:45Spot versus futures arbitrage, which is seen as more of a core strategy for most people where you're profiting,
02:52you buy the asset on spots, and you shop futures, right?
02:55So you profit from the price convergent, the funding payments.
02:59For example, you've got a trader who sees a 1.5% spread, opens a hedging position,
03:05earning $300 after convergence, right?
03:09No market predictions required.
03:11So that's what you get really when you're doing arbitrage.
03:15Then you've got funding rate arbitrage, perpetual futures, paying traders every few hours, right?
03:20Funding is positive, short-received payments, professional funds,
03:24literally run billion-dollar positions purely to collect funding,
03:28and cross-exchange arbitrage, which is the third type of arbitrage here where, you know,
03:33listing and news events cause market temporary price gaps, right?
03:38So one token trades maybe at a high amount of border dex than on Binance that's not trading yet, right?
03:46So the problem traders are faced.
03:48Like I said, it's always the execution, the opportunities only last a few seconds.
03:52The spread, random monitoring across all exchanges is very difficult.
03:58So that's where you need tools like arbitrage scanner,
04:01which really kind of gives you a no-API access so your funds actually stay safe.
04:07The platform never touches your money, no withdrawal permissions.
04:10They're not automated the risk there.
04:12And you get two-second real-time alerts as well across centralized exchanges and dexes,
04:19across 500 dexes, 90 blockchains, spot and futures strategies are also built in.
04:26And you've got so many tools that you get with an arbitrage scanner,
04:31like the Perpetual Arbitrage Screener, the DEX Arbitrage Scanner.
04:34You've got the funding rate mechanisms that really kind of give you a good grasp
04:40on how to capitalize on the arbitrage in the crypto market.
04:45So if you're a beginner or a pro trader, this is a tool that you want to explore.
04:49Check out the link to Arbitrage Scanner.
04:51Check out the link to the full review so you can get more in-depth
04:54on how to actually do arbitrage training.
04:57The link is in the description.
04:59I'll see you guys next time.
05:00Peace.
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