The Bitcoin price has gone through the roof and is now almost at $20K. That is amazing news for Bitcoin holders, but even though the market is bullish right now, BTC is famous for its intense volatility. We have all seen Bitcoin soar and then take a dive before now, so smart investors know to be prepared for anything to happen at any time. For short-term traders who can handle the pressure, Bitcoin’s dramatic ups and downs can be incredibly lucrative, but there is no denying that the risks are significant, and a sudden drop can lead to substantial losses.
So how can I avoid the risk?
One way that many investors avoid exposure, while benefiting from the growing interest in Bitcoin is by HODLing. This involves buying BTC and then simply holding on to it while it appreciates in value over the long-term. This will certainly mitigate your risk, but it basically means that your capital is just sitting idle, while it could be working on your behalf.
One strategy that is gaining massively in popularity is crypto arbitrage, as it reduces risk to close to zero, while offering great returns. It involves taking advantage of the fact that for a brief stretch of time a coin can be available on different exchanges at different prices. The price discrepancy will naturally resolve itself, but while the window of opportunity exists, a trader can buy the coin on the exchange where the price is lowest and then sell the coin on the exchange where it is highest, making a profit on the spread.
This is pretty much exclusively done using an automated platform, as it involves processing a huge amount of data simultaneously and executing multiple trades at lightning speed. To get a better understanding of how it works, let’s look at one of the biggest names in the business, ArbiSmart, an EU licensed, automated crypto arbitrage platform.
The ArbiSmart algorithm can handle a huge volume of trades at once. It scans 35 different crypto exchanges simultaneously, 24 hours a day, to find and automatically exploit price inefficiencies the second they develop and provide guaranteed returns.
Ok, so it’s not as risky as day trading, but is there any danger involved?
While crypto arbitrage is safer than day trading on the exchanges, it is still a form of digital currency investing and therefore you need to keep your wits about you. The world of blockchain and crypto is still very under-regulated. Scammers and hackers, as well as a variety of other criminals are exploiting the anonymity of the crypto sphere and the lack of oversight to take advantage of the unwary. So, how can you protect yourself? Well first of all, before you commit your Bitcoin capital to any platform check them out thoroughly. See that they have positive feedback from the crypto community, across various social media channels, consumer review sites and industry publications. Going back to our ArbiSmart example, the company has a stellar reputation online with an excellent Trustpilot rating and strong support in the press.
Also in its favor is the fact that the company has multiple support channels, from Twitter and Telegram to email, phone and Whatsapp, among others. Accountability is key. What you don’t want is a situation where you need assistance and there is just a chat bot and no way to interact with a real person.
Finally, though most important of all, to minimize your risk, you need to only invest your Bitcoin with a licensed and regulated company. For example, ArbiSmart is FIU licensed, meaning that it is regularly audited, with client and company accounts held separately, strict data security measures, client capital protection and KYC/AML protocols.
I like that my risk is lower but what about my profits?
That’s no problem at all, since crypto arbitrage can be super-lucrative. At ArbiSmart, for example, you can make up to 45% a year depending on the size of your investment and the great part is that there are no surprises, as market volatility will have no impact. Go to the company account page and you can see exactly how much you can expect to make per month and per year, based on your account level.
You should make sure, whichever platform you are using that you can earn compound interest on your investment. The more revenue channels you can enjoy from a single source, the better.
For example, at ArbiSmart, not only will you benefit from compound interest but also from the capital gains generated by the increasing value of RBIS, the platform’s native token. When you register and deposit with the platform, your funds are converted into RBIS to be used for trading. They can be withdrawn in Euro or Bitcoin at any time but for the period your capital is invested in the platform it is gaining in worth along with the token. Since it was introduced in early 2019, the token has risen in value by over 120% and it is projected to go up by close to 3,000% by the end of 2021, in line with strong growth in client acquisition as well as the expansion of the company’s products and services.
As we can see, with crypto arbitrage, you can invest your Bitcoin safely, without being in danger of losing all your savings with every major price swing. You can put your BTC to work, with zero effort, while still enjoying huge returns, as high as 45% a year.
*This post has been paid by Arbismart. The Cryptonomist did not write the article nor tried the platform. This is not investment advice.