Bitcoin has been making massive gains and this week it hit another all-time high. Don’t panic it’s not too late to get a piece of the action and there’s a way to do so, without incurring any risk of the price dropping just as fast as it went up.
The strategy that we’re referring to is crypto arbitrage. This is not something new. It has been around for a while now and has been growing in popularity not just among the crypto community but also among mainstream investors, as financial institutions, hedge funds, and investment firms of all sizes are recognizing its value as an exceptionally low risk form of investment, suited to even the most conservative portfolio.
What makes it so attractive? It doesn’t just involve close to zero risk, it also offers incredible returns.
How Does Crypto Arbitrage Compare to Other Bitcoin Investing Strategies?
Crypto Day Trading
One of the most popular strategies with Bitcoin is short term trading. On the plus side, you are completely in control, you can see results in a matter of hours and the return on investment can be huge. On the other hand, the risks are just as large, and it is equally possible to have a bad run and lose it all as fast as you earned it. Then of course there is the fact that day trading is time and knowledge intensive, requiring you to be glued to your screen using a range of technical indicators to research price patterns and forecast market movements.
How does crypto arbitrage hold up in comparison? Well firstly, crypto arbitrage is not vulnerable to crypto market volatility, so there is almost no risk involved at all, as it generates profits by taking advantage of price inefficiencies across crypto exchanges.
In other words, for short periods, a cryptocurrency can be available at different prices at the same time. In the brief window of time before the market adjusts and the price difference resolves itself, you can buy the coin on the exchange with the lowest price and then instantly sell it on the exchange where the price is the highest to make a profit on the difference.
Crypto arbitrage tends to be automated as it requires a speed and efficiency that no person can match. An automated platform does all the work for you, so no market knowledge is needed, and no effort is required.
To understand better, let’s take one of the biggest, regulated crypto arbitrage platforms, ArbiSmart, as an example.
The ArbiSmart platform scans 35 exchanges simultaneously, 24 hours a day. It monitors the market, finding and then exploiting temporary price inefficiencies to generate passive profits reaching as high as 45% a year. Profits are earned on a daily basis and can be withdrawn at any time in either fiat or crypto.
If you are comfortable at a more relaxed pace and don’t have the temperament for the high-risk, high-reward nature of day trading, there is always HODLing. This slow-but-steady approach is very low-risk and exceptionally low-effort, since it involves a strategy of doing nothing, as you are holding on to your Bitcoin for the long term until it appreciates over time. Clearly it has been working so far for those traders, who got on board early. The downside though is that most of us didn’t get in on the ground floor with BTC, so it is a far more expensive and uncertain strategy today. Also, your capital is basically just sitting idle and not working for you.
When compared with HODLing, crypto arbitrage is equally low- effort, but it has the significant advantage of making you money every minute. At ArbiSmart for example, you register and deposit your Bitcoin or other crypto or fiat currency. Then your funds are converted into RBIS, the platform’s native token, to be used for crypto arbitrage trading (although they can be withdrawn at any time in fiat or crypto).
Profits are guaranteed and range from 10.8% to 45%, depending on the amount you invest. You can check out the company’s account page to see exactly how much you will earn per month and per year. You won’t just be earning compound interest on your investment, you will also be making additional capital gains from the steadily rising value of the RBIS token, which has already gone up by over 120% and is projected to continue rising in value, based on its current growth trajectory, rising by 3000% by the end of 2021.
DeFi Yield Farming
If you want high returns and for your money to be working on your behalf, another option is the recent trend of DeFi yield farming. It involves loaning your capital to a decentralized application so that they can use it to make a profit. In return, you get paid interest and earn reward tokens. On the upside, profits can be sky-high. Also, processes are extremely rapid with no identity checks or oversight. The disadvantages are that these applications are vulnerable to hacks and have an unfortunate recent history of serious breach and there are few consumer protections. In addition, many of the tokens being offered as rewards have not had time to mature so they are unproven and may end up losing their worth, bringing down the entire ecosystem. This is of particular concern when we think about the inflated demand that is a result of yield farmers lending their crypto to a DeFi application (dapp) and then borrowing back their capital to loan it out again, to earn greater rewards, artificially inflating the price. Price manipulations followed by a large sell-off from a single individual with a large cache of tokens can bring the whole house of cards down. Finally, if the currency you used as collateral to borrow from the dapp goes below a certain value threshold, this can trigger liquidation, and the loss of all your funds.
With crypto arbitrage there is none of the complexity or risk involved in the rapid-fire lending and borrowing strategies that can lead to inflated prices. At ArbiSmart for example, the process is simple, transparent and you know exactly what to expect with regard to your earnings, while the token has experienced steady, reliable growth.
In addition, as a fully FIU licensed platform, ArbiSmart offers consumer protections in line with the strictest EU regulatory requirements, including rigorous data security protocols and a hybrid of centralized and decentralized mechanisms to further safeguard against hacks. It also acts in full compliance with AML/KYC protocols to protect against money laundering and fraud. Since there is also capital insurance to protect all client capital, your funds are protected even if a hack were to succeed. There is also a high level of accountability with support offered via multiple channels, including email, phone, Telegram, Twitter, Messenger, Viber and WhatsApp.
There are obviously plenty of ways to use your Bitcoin to earn a profit. On all fronts, from safety, to profitability, crypto arbitrage is the best means of protecting and growing your capital, by avoiding the dangers of crypto market volatility, while still providing rapid, generous returns with minimal risk and zero effort.
*The Cryptonomist has been paid to publish this article. The Cryptonomist didn’t write the article and it didn’t try the platform.