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An Intro to Crypto Arbitrage in Under 10 Minutes

Adam Tracey
An Intro to Crypto Arbitrage in Under 10 Minutes



The crypto markets can be fickle at the best of times. While some traders do exceptionally well, much of it comes down to luck, as is the nature of such a volatile market. However, a technique existed long before crypto that transitions extremely well to these modern digital assets.

What is Crypto Arbitrage?

Cryptocurrency arbitrage trading is a form of trading that exploits the variations in prices between different markets. While best known from more traditional markets, arbitrage trading converts incredibly well to the cryptocurrency space, given the mixture of liquidity and accessibility resulting in quite substantial price discrepancies at times.

Where are the Best Arbitrage Opportunities?

Even with the increased availability of bitcoin and other major cryptocurrencies in recent years resulting in a relatively stable market price across some markets, there are still some very profitable opportunities if you know where to look.

Peer-to-peer trading (P2P) is a type of trading that has been active in the cryptocurrency space since the early days of bitcoin. Every day, traders worldwide are making money with their homegrown trading businesses or side hustles that, at their core, are just a form of arbitrage trading.

Even in countries where access to crypto is relatively high, not everyone has the exact needs or preferences, resulting in a massive alternative market for P2P trading. If you're looking for the best arbitrage opportunities, cryptocurrency trading via P2P marketplaces is one of the best modern ways to make money trading crypto.

Regional Arbitrage

Not everywhere has the same access to crypto, resulting in excellent margins if you have access to payment methods popular in these regions. While some traders opt to go the cash route and trade bitcoin for cash-in-person (sometimes called face-to-face trading), there are typically many other alternatives.

The problem with many crypto exchanges is that they only provide access to a very minimal range of deposit options, sometimes just a single one (often bank or wire transfer). While banking may seem like an everyday thing to you, this isn't the reality that many people experience. However, in most parts of the world, a range of digital payment methods like PayPal, M-Pesa, Western Union, or even something unexpected like gift cards have high use rates and enable you to trade crypto in these regions on P2P marketplaces for a profit.

Premium Payment Methods

You may have heard someone say something along the lines of "you can't put a price on convenience," and the reality is that you actually can when it comes to crypto trading.

One of the other highly profitable methods of arbitrage crypto trading is found in payment methods themselves, and the price people are willing to pay for convenient or necessary access. Some payment methods are difficult to buy crypto using large centralized exchanges, yet are often preferred by buyers looking to buy crypto fast and are willing to pay extra for the privilege.

Suppose you are willing to accept slightly more exotic or in-demand payment methods. In that case, you can become a profitable P2P vendor and earn money trading crypto without having to have a crystal ball to attempt to guess the direction the market is going to take.

How to Get Started with Crypto Arbitrage Trading

Step 1: Create an account over at LocalCoinSwap; it's the best place to trade bitcoin and other cryptos P2P and still supports cash trading alongside hundreds of different payment methods.

Step 2: Consider which payment methods you have available to you that you may wish to accept trades for and whether you want to be on the buy or sell side of the trades.

Step 3: Create trade offers and get ready to start accepting trades. In the meantime, spend some time making sure your trade terms are clear and your profile is filled out well. Marketing yourself well will help attract more traders and help you make the most of your arbitrage trading opportunities.

Is Crypto Arbitrage Legal?

Trading cryptocurrency is legal in most parts of the world, as is using arbitrage to profit from market volatility and inefficiencies. One of the ways markets self-regulate and maintain consistent pricing is through arbitrage trading, as these price discrepancies produce a natural incentive to trade them down.

The Benefits of Crypto Arbitrage

  • Make profitable trades under any market conditions
  • Avoid hazardous leverage trading
  • Improve access to crypto worldwide
  • Access to consistent trading opportunities

Want to learn more about crypto arbitrage or explore the best free cryptocurrency trading guides? Check out the LocalCoinSwap Academy, where you can find out why P2P trading is still the best way to trade crypto.

Adam Tracey
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