Are you curious about cryptocurrency arbitrage bots and their potential for earning money? This article delves into the concept and presents a collection of reliable crypto robots that can be utilized for profit.
Top Crypto Arbitrage Bots & Platforms In 2023
The Farrench AI BOT is a highly rated cryptocurrency trading bot that utilizes fully automatic AI technology for quantitative trading. It operates seamlessly with popular digital currency platforms, eliminating the need for manual intervention. Its advanced algorithms and intelligent quantitative technology, combined with cloud-based big data computing, enable it to execute trades in just 0.05 seconds, while also eliminating the emotional stress and fatigue that often accompany market watching.
The Farrench AI BOT is equipped with various algorithms and techniques to adapt to both bullish and bearish market conditions. In bullish markets, it utilizes tracking stop profit technology, continuous monitoring, and 24-hour market analysis to sell at the peak of profits, capturing maximum gains. In bearish markets, the Farrench AI BOT safeguards customer assets and generates stable profits through monitoring market trends, avoiding trades in a downward market, or short selling to take advantage of the market.
Features:
· Secure Funds: The Farrench AI BOT operates through the API interface provided by the exchange, ensuring the funds remain in the user’s account and cannot be touched. It only has the ability to buy and sell, not withdraw funds.
· Fully Automatic Execution: The Farrench AI BOT trades automatically 24/7 on cloud servers after initializing set parameters and buys or sells based on pre-determined conditions, eliminating the need for constant market monitoring and yielding a daily income of 2–3%.
· Trading Strategy and Position Allocation: The Farrench AI BOT offers a range of built-in trading strategies, from conservative to aggressive, to cater to various risk levels. It intelligently allocates positions and conditions of each trade, implementing the trading strategy and adjusting accordingly with real-time data.
· Multiple Trading Variety Monitoring: The Farrench AI BOT can monitor multiple currencies and execute strategies simultaneously, with independent threads for each variety, ensuring prompt trade execution.
· Easy to Use: With just one click, users can set parameters, choose strategies, and start trading, making it easy for even novice digital asset traders.
· Emotion-Free Trading: The Farrench AI BOT makes impartial, objective trading decisions and avoids the influence of subjective emotions. It will not trade or close positions if set conditions are not met.
· Potential for High Returns: By harnessing the power of AI quantitative trading, the Farrench AI BOT promises a consistent daily income, potentially doubling your money within a month.
Cons:
· The Farrench AI BOT only accepts USDT as a deposit currency.
Overall, the Farrench AI BOT is a reliable and hassle-free way to grow your investment portfolio, offering benefits such as secure funds, fully automatic execution, multiple trading variety monitoring, easy-to-use interface, emotion-free trading, and the potential for high returns. With no prior knowledge of cryptocurrency trading required, consider giving the Farrench AI BOT a try in 2023.
Pionex
Pionex is the world’s first exchange offering free, integrated crypto trading bots. Established in 2019, it is one of Asia’s fastest growing platforms, with a daily trade volume exceeding 30 million dollars. It provides a fully automated crypto trading environment, with over 100,000 users and a team of over 100 professionals, including the founder and CEO.
Pionex is licensed by the USA Money Services Business (MSB) and the Singapore Monetary Authority (MAS). It integrates liquidity from both Huobi Global and Binance, ensuring 24/7 compliance for its crypto trading bots. The company has received support from BitUniverse and investment from well-known Chinese venture capital firms such as ZhenFund and Gaorong Capital, adding further legitimacy to the platform.
Pros
Has a mobile application
Fully customisable interface
A set of 12 bots available
Fees are as low as 0.05% for takers/makers
Liquidity back-up from Binance & Huobi
More than 40 funding crypto assets available
Licensed by US FinCEN
Cons
No fiat funding
Poor customer care
3Commas
3Commas is among the top 3 leading crypto bots in the market. This 3Commas review covers all significant features of this trading bot, its key benefits and drawbacks, its comparison with competitors, and the most effective and efficient strategy for use with 3Commas.
Do you believe that cryptocurrency is the future and want to invest more, but lack the budget for larger purchases and the time for trading to accumulate? If so, a crypto trading bot like 3Commas may be the answer for you.
Pros
Smart & Copy trading features, users can copy bots of famous traders in 1 click
Cloud platform, meaning the bots are up and running no matter what
User-friendly interface and responsive customer support
A wide range of automated bots available, fitting any trading strategy
Well-explained FAQ section
Allows launching the first DCA bot for free
Cons
The dashboard might seem a bit overwhelming at the start
Subscription-based (but has a fully-fledged free version)
What Is Crypto Arbitrage?
Crypto arbitrage is a profit-making strategy that involves purchasing a cryptocurrency like Bitcoin, Ethereum, or any other digital asset on one exchange and then selling it on another exchange for a higher price. The difference in price is the profit.
The fundamental distinction between cryptocurrency and conventional arbitrage lies in the volatility linked to cryptocurrency. The majority of digital assets tend to be more volatile compared to traditional assets, resulting in the possibility of higher profits but also greater slippage risks. Due to the manual execution of crypto arbitrage trades often being too slow to be effective, many utilize arbitrage trading bots in the cryptocurrency markets.
The small price differences for the same crypto asset often require traders to make large, fast trades to profit from crypto arbitrage. This necessitates having multiple exchange accounts with sufficient funds, as well as a dedicated account for deposit and withdrawal fees. Despite the high barriers to entry, crypto arbitrage continues to attract experienced traders.
How Does Cryptocurrency Arbitrage Work?
Do you recall the significant drop of UST? It provided a prime opportunity for arbitrage as the price varied across different exchanges. Suppose you purchased UST at a price of $0.5 and quickly sold it for $0.55 per UST. You would earn a profit of $0.05 per UST traded, or $50 gains if you traded 1000 UST.
You could perform the trade either on the same exchange or use multiple platforms, as there are two main types of arbitrage trading:
Triangular Arbitrage: This type of arbitrage involves exploiting price differences between two main assets within a single exchange, also known as cross-currency arbitrage. A third asset is typically used to withdraw profits.
Spatial Arbitrage: This involves simultaneously trading an asset on multiple exchanges, taking advantage of price disparities and collecting profits. Spatial arbitrage is a more widely used strategy compared to single-exchange arbitrage.
What Are The Pros and Cons of Crypto Arbitrage?
Just like any other business, crypto arbitrage has its advantages and disadvantages. Here’s a brief overview:
Crypto Arbitrage Pros
Flexibility. You can arbitrage remotely and anytime from anywhere in the world
Reliability. Limited risk of losing your funds, as price fluctuations drop and recover fast
High gains. Fast and steady returns per arbitrage session. On average, you can make as high as 4% of your capital within an hour.
Crypto as a market. Crypto trading is still unregulated and inconsistent, meaning the legal information across CEX is transferred slowly, which is double as important for panic events like the recent UST depeg. There are also fewer arbitrageurs compared to stock, bond, or any other investment market.
Crypto Arbitrage Cons
Blocking cards. You will need a spare bank card in your pocket, as there is a chance of blocking due to high turnover in the account.
Required speed. Price gaps usually don’t last very long. You need to be attentive to monetize the opportunities.
Price Slippage. When a transaction costs more than you expected to pay, it can wipe out your profits. Slippage happens if your order dams the cheapest offer on the order book.
Fees. Arbitrage is associated with multiple deals on a regular basis, each sucking out money in the form of fees. Even average fees can anchor your profits, especially if margins are low.
How To Choose A Cryptocurrency Arbitrage Platform
Web is full of arbitrage platforms, but not all of them are built equal — some vary significantly in terms of trading strategies, others focus on quality but lack affordable plans, while the rest provide neither of the above. Let’s break down key components that might play a big role when you opt for an arbitrage platform.
Safety
Regardless of the platform, you’ll have to share your wallet keys and account data with the bot. Which is why it’s extremely important to pick a rock-solid software provider able to protect your data no matter what. Here are some tips to follow:
Avoid applications with a poor review score or no
Steer clear of applications with no security audit reports
Make sure to disable auto-withdrawal functions on accounts you grant access to
You might want to prefer open-source over anything else, as it’s the most reliable option
Community is yet another significant placeholder, as it plays an essential role in helping you spot a safe app. Any business is about people building, surrounding, and following it. If the app yields good results, people will follow and form a vast fanbase along the way.
That’s why you should always keep reviews in mind. An excellent way to find some valuable, reasonable, and reliable comments is Reddit. The number of people following a bot also matters, but the size of arbitrage communities is tiny. You might want to pick a bot with at least several thousand followings. Otherwise, you risk running into a scam.
Bots with fewer followers are not necessarily some sort of scheme, but it might be challenging to solve software-related issues if you have no one to share with. The community can help, and it usually does so even faster than customer support.
Exchanges Supported By The Crypto Arbitrage Bot
Arbitrage strategies tend to be more effective if a trader uses many platforms and assets. The logic is pretty straightforward: more platforms = more assets traded = more arbitrage opportunities. As a result, experienced traders are looking for software supporting as many crypto exchanges as possible.
Any crypto arbitrage software should have integration with exchanges like Binance, Coinbase Pro, Kraken, OkeX, Gemini, Huobi, KuCoin — the more, the better. A prominent example would be 3Commas supporting 23 major exchanges.
Price Justification Of Crypto Arbitrage
Even the best bot won’t make you profits if it’s too expensive, as such bots might eat out all the money you made. Which is why the software’s cost, trading fees and commissions are important criteria when it comes down to arbitrage.
As a rule of thumb, the more you pay for software, the more functions it provides. You should find software that provides free features first, so you can try them out and decide whether you want to proceed. Once you like some features, you can pick a cheap paid plan for the second test.
Most go-ahead platforms provide monthly subscription plans to avoid overcharging. In other words, try to find a platform that won’t charge you too much for using the arbitrage functions. If a platform provides only a one-time payment or any kind of life-long packages, that’s a red flag for sure.
Simplicity
Unless you’re a veteran trader & programmer, you should focus on simple platforms requiring no technical skills. Some platforms are more user-friendly than others, and you should take that into account when picking an arbitrage bot.
Bots like Blackbird target pro traders and programmers, implying you would need coding skills to customize and adjust trading strategies, track some data, etc. Not to mention ununified interfaces, forcing traders to use external services like data aggregators and charts.
Easy-to-use bots provide access to a wide range of crypto tools under the platform’s roof, so you don’t have to switch tabs each time. It might seem small, but the difference in the complexity, functions at hand, and the automated processes available might play big numbers over the long run.
Backbone Software
Arbitrage is the game of speed, as the difference in the price is all about fractions of a second.
Therefore, the arbitrage software must operate as fast as possible to spot, process, and carry out such opportunities. Moreover, bots compete with each other because the price gaps are quite limited in volume. Only the fastest and most reliable bots can monetize on price divergence.
A cloud-based bot is a good way to start, as it implies a software provider has an established server structure that won’t let you down. Most cloud-based providers are fast enough to embrace 99% of arbitrage deals.
Closing Thoughts
Crypto arbitrage is a great opportunity to make stable income from cryptocurrency if you understand what you are doing. In practice, this means that there are a number of pitfalls that you should consider in order to make money in this direction.
As a rule, the technical component is the main difficulty of arbitrage, because the profit depends directly on the ability to find and implement information in the shortest possible time. In order to avoid having to do it manually, you can use a customized bot, which will execute specific instructions in a predetermined price range. In this way, you will minimize your risks and increase your chances of making a profit.
But you should always remember that the market is full of inefficient and outright fake bots, which can empty your wallet. You should not be deceived by free programs and cheap services because it is very dangerous and can lead to the loss of all your funds. Instead of taking your word for it, you can choose arbitrage bots with positive reviews like 3Commas.