What is arbitrage?

First of all: What does it mean to arbitrage a cryptocurrency?

It means to take advantage of price differences across different exchange platforms. Let's make a study case:
XypherCoin is being traded on Bittrex and Cryptopia. For it's popularity, the volume and activity on Bittrex is high. However, this doesn't happen on Cryptopia as it is not that popular. Unusual market activity spiked the price on Bittrex by 30%; however, the prices are still normal on Cryptopia due to it's low activity. Any trader can buy 1000 units of XypherCoin at 1$ on Cryptopia, send them to Bittrex and sell them for $1,30 per unit. This short transaction allowed a quick 300$ profit in matter of minutes

This happens daily. High volume exchanges respond faster to external market conditions, while the rest don't. Some markets have low liquidity which allow to even higher price differences. CrossFire's duty is to search between thousands of altcoins for the most profitable arbitrage opportunities.

CrossFire features

Built-in wallet checker
Search by profit %
Custom favorite list

Search by market pair

Search by coin

Search by exchange

Now what?

Now that you know what CrossFire can do for you, it’s time to get to work.
BUT! Even if you have arbitraged before, read the following quick start guide. It can not only save you time, but most importantly, money

Find your arbitrage opportunity

There are hundreds of arbitrage opportunities. Find one that suits your current needs (for example, find one where the lowest price is on the exchange you have already funded). On CrossFire, you can search by base market (BTC, ETH, USDT, and many more), exchange (14 and more coming) and by single coin ticker.

Check the currencies

By nature, cryptocurrencies are decentralized. Yay! However, one small disadvantage of decentralization is the fact there is not a central authority that regulates which cryptocurrency uses which ticker. How ironic. For instance, some exchanges establish the ticker "BCC" for Bitcoin Cash, while some others use the same ticker for Bitconnect. Make sure you double check that the currency where you are buying low is the same where you will be selling high. We are constantly removing the wrong pairings but since new coins and pairs get added automatically, some might slip up. Be careful! You will normally notice this first hand as those currencies have exorbitant price differences.

Wallet Status Check

Alright! The arbitrage opportunity is live, and the coin is the same. Next thing is to check their wallet status. CrossFire has a built-in wallet checker for some exchanges where you can quickly check some of the wallets. There is a downside: some exchanges do not provide a way for us to check their wallets, while some others provide highly unreliable ways (like YoBit) to do it.

You should always check every wallet you will be sending to or receiving from. Pay special attention to exchanges with high amount of altcoins (Yobit, NovaExchange, Cryptopia), as some of their wallets are running outdated and unreliable software.

Any message showing 'Maintenance' or 'Delayed' is a red flag. You can also only use reliable and established coins/exchanges whose wallets are always online. Most traders suffer from high stress upon noticing that the coin they bought for low has an offline wallet. Avoid stress :)

Buy it low

If everything appears to be fine between the two exchanges, then you are ready for the risk!
One good practice is to buy the MINIMUM amount possible and proceed to withdraw. Few things can happen:
GOOD: The withdraw went through and is showing in the incoming deposits page of the other exchange. Eureka!
NOT THAT GOOD: The withdraw went through and is showing in the incoming deposits page of the other exchange. Sadly, not every altcoin is like DigiByte. Some of them take insane amounts of confirmations, and by then, the arbitrage opportunity might be lost. Watch out!
BAD: For some reason the exchange doesn't accept the deposit address of the other exchange. Dead end.
BAD: You get a last minute 'Wallet Maintenance' that wasn't showing before (this is why you buy the minimum amount possible, so you take the minimum loss). Dead end.

Sell high

If you made through here, it means you have made some easy money. Place a sell order at profit and enjoy. If the arbitrage opportunity is lost (maybe the coin took too long to confirm), don't sell it low Remember that you are never at loss until you sell it for low.

Main issues while performing arbitrage with altcoins

Here is a short summary of the several issues you might face while performing arbitrage:
1- *Confirmation times: while some cryptocurrencies have proven with time their reliability speed, some others don’t. Many Unknown currencies have slow confirmation times, some of them are faster but they may require out of the ordinary amounts (200 confirmations is a thing). An arbitrage opportunity might be lost if the confirmation time is slow
2- Fees: upon performing successful arbitrage, fees have to be taken into account. Trading fees along with withdrawal fees might pass a toll on your wallet if not careful enough
3- Liquidity: many exchanges with high volume can have their arbitrage opportunities wiped out in seconds, and you may end up not being able to sell your altcoins in profit.

Is there money to be made with arbitrage?

Yes. There is definitely money to be made with arbitrage.
Is it a way to make steady passive income with arbitrage? Not really.

Unless you have a bot with a solid arbitrage strategy, you won’t be able to make ‘passive income’ with altcoin arbitrage. However, some profit here, some other there, won’t hurt your portfolio.

Telegram bot for arbitrage

@Xypherian, our personal trading assistant, can perform arbitrage at the touch of your phone. Simply send the command /arb [Coin] and see what happens!

Don’t forget CrossFire and 6 more powerful day trading tools are available at Xypher. Ignite your portfolio today with some wild arbitrage for $25.99 on Xypher.