Arbitrage betting is not always about slapping down a bet on sports. In fact, there are other ways you can wager, too. Sometimes, arbitrage betting can directly involve making money out of buying and selling currencies, specifically cryptocurrencies. Make no mistake about it, Bitcoin arbitrage betting is considerably riskier and trickier than betting on sports, but it is a topic worth exploring if investing in cryptocurrencies interests you. In this guide, we will look at the ins and outs of this topic.
Arbitrage Be.ng Applied to Bitcoin
First and foremost, it is essential to understand that there are two types of Bitcoin arbitrage betting options for you out there. As men<oned, you can wager on sports with BTC. Betting on sports with Bitcoin is not any different from conventional arbitrage sports betting with FIAT currencies.
However, the second type of Bitcoin arbitrage betting involves trading Bitcoin - buying and selling it to make a profit. This is considered a form of gambling, as you are taking a risk on something that may or may not occur. This is the focus of this guide. Let us explain this clearly and look at an example in the next section.
What Is Bitcoin Arbitrage Betting?
In a sense, Bitcoin trading with arbitrage is the buying of Bitcoins at an exchange for one price and selling them at another for a higher price. You must be sure that you have got a decent number of exchanges to choose from for this to occur. Each exchange will have its own prices, which you may be able to take advantage of. As Bitcoin is volatile, and a liLle volatility can shake up the market prices, there may be times when it is profitable to buy and sell Bitcoins for different rates. Buying BTC cheap and selling it for a higher value depends on whether you can find value in the market.
Below, you will find a classic example of how this can work:
Let us imagine that Exchange A is selling 1 BTC for $11,561. Over at Exchange B, 1 BTC is being sold for $11,645. This means that there is an $87 swing in the sale of a single Bitcoin. If you were to purchase one Bitcoin for $11,561 at Exchange A and sell it at Exchange B for $11,645, you would make (in theory) a profit of $87. That does not sound like an immense profit, but if you were to purchase 100 BTC and sell them at the same prices using those exchanges, you would make a lot more in profit. Naturally, as with all forms of arbitrage be*ng, the more you are prepared to put in and risk, the greater the reward.
You must be sure that there is value in the market prices, and to do this, you can use a simple equa<on, like so:
- Purchase Price of BTC x Number of Bitcoins Bought = Total Expense
- Sale Price of BTC x Number of Bitcoins Sold = Total Revenue
- Total Revenue - Total Expense = Total Profit
Going back to our example above, let us imagine that we bought 3 BTC. This equa<on will look like this...
- $11,561 x 3 (BTC) = $34,683
- $11,645 x3 (BTC) = $34,935
- $34,935 - $34,683 = $252 profit
Does Arbitrage Betting with Bitcoin Work?
While all forms of arbitrage betting have their pros and cons, there are considerably more risks aLached to Bitcoin arbitrage betting. One of the biggest problems is that the value of Bitcoin rises
and falls regularly. This means that you must move your FIAT currency and cryptocurrencies quickly to ensure that you can buy and sell them at the rates found at the exchanges. If there is a lengthy delay in transac<on <mes, you may end up buying and selling at less favourable rates.
Markets and exchanges tend to correct arbitrage opportuni<es quickly. If Exchange B notices that there is a window for bettors to engage in BTC arbitrage betting, they will do all they can to correct those rates, oben before you can move funds. You can sometimes alleviate this by only opting to use the fastest exchanges. If you are on the ball when it comes to moving money, there are definitely Bitcoin arbitrage options open to you, though.
The Risks Associated with Bitcoin Arbing Online
Of course, there are risks associated with Bitcoin arbing, too. Fees tend to be a problem. Your exchange (or exchanges) can hit you with fees for trading. Your banks may issue a transaction charge for moving FIAT currency around, and the Bitcoin placorm itself is not devoid of fees. There is a danger that if there is not much value in the market, too many fees can diminish any profit you make.
The market is also volatile. As such, you must pay attention to efficiency when Bitcoin arbitrage betting. If there is a big swing in BTC value, you could end up making a lot less than you envisioned at the start. Moreover, there is always a risk that if this swing occurs alongside a range of fees, then you could even end up with negative equity. Cryptocurrency exchanges are frequently targeted by hackers, too. Financial crashes, major dips in the value of Bitcoin also have the potential to ruin your Bitcoin arbitrage betting options.
While arbitrage betting on sports with Bitcoins has fewer risks, any profit accumulated tends to be a lot lower than if you try to buy and flip BTC via exchanges. This form of arbitrage betting requires you to have a great understanding of Bitcoins (and cryptocurrencies in general) before you begin. If you know what you are doing, though, there is undoubtedly an array of Bitcoin arbing options open to you.
Arbitrage Be.ng Applied to Bitcoin
First and foremost, it is essential to understand that there are two types of Bitcoin arbitrage betting options for you out there. As men<oned, you can wager on sports with BTC. Betting on sports with Bitcoin is not any different from conventional arbitrage sports betting with FIAT currencies.
However, the second type of Bitcoin arbitrage betting involves trading Bitcoin - buying and selling it to make a profit. This is considered a form of gambling, as you are taking a risk on something that may or may not occur. This is the focus of this guide. Let us explain this clearly and look at an example in the next section.
What Is Bitcoin Arbitrage Betting?
In a sense, Bitcoin trading with arbitrage is the buying of Bitcoins at an exchange for one price and selling them at another for a higher price. You must be sure that you have got a decent number of exchanges to choose from for this to occur. Each exchange will have its own prices, which you may be able to take advantage of. As Bitcoin is volatile, and a liLle volatility can shake up the market prices, there may be times when it is profitable to buy and sell Bitcoins for different rates. Buying BTC cheap and selling it for a higher value depends on whether you can find value in the market.
Below, you will find a classic example of how this can work:
Let us imagine that Exchange A is selling 1 BTC for $11,561. Over at Exchange B, 1 BTC is being sold for $11,645. This means that there is an $87 swing in the sale of a single Bitcoin. If you were to purchase one Bitcoin for $11,561 at Exchange A and sell it at Exchange B for $11,645, you would make (in theory) a profit of $87. That does not sound like an immense profit, but if you were to purchase 100 BTC and sell them at the same prices using those exchanges, you would make a lot more in profit. Naturally, as with all forms of arbitrage be*ng, the more you are prepared to put in and risk, the greater the reward.
You must be sure that there is value in the market prices, and to do this, you can use a simple equa<on, like so:
- Purchase Price of BTC x Number of Bitcoins Bought = Total Expense
- Sale Price of BTC x Number of Bitcoins Sold = Total Revenue
- Total Revenue - Total Expense = Total Profit
Going back to our example above, let us imagine that we bought 3 BTC. This equa<on will look like this...
- $11,561 x 3 (BTC) = $34,683
- $11,645 x3 (BTC) = $34,935
- $34,935 - $34,683 = $252 profit
Does Arbitrage Betting with Bitcoin Work?
While all forms of arbitrage betting have their pros and cons, there are considerably more risks aLached to Bitcoin arbitrage betting. One of the biggest problems is that the value of Bitcoin rises
and falls regularly. This means that you must move your FIAT currency and cryptocurrencies quickly to ensure that you can buy and sell them at the rates found at the exchanges. If there is a lengthy delay in transac<on <mes, you may end up buying and selling at less favourable rates.
Markets and exchanges tend to correct arbitrage opportuni<es quickly. If Exchange B notices that there is a window for bettors to engage in BTC arbitrage betting, they will do all they can to correct those rates, oben before you can move funds. You can sometimes alleviate this by only opting to use the fastest exchanges. If you are on the ball when it comes to moving money, there are definitely Bitcoin arbitrage options open to you, though.
The Risks Associated with Bitcoin Arbing Online
Of course, there are risks associated with Bitcoin arbing, too. Fees tend to be a problem. Your exchange (or exchanges) can hit you with fees for trading. Your banks may issue a transaction charge for moving FIAT currency around, and the Bitcoin placorm itself is not devoid of fees. There is a danger that if there is not much value in the market, too many fees can diminish any profit you make.
The market is also volatile. As such, you must pay attention to efficiency when Bitcoin arbitrage betting. If there is a big swing in BTC value, you could end up making a lot less than you envisioned at the start. Moreover, there is always a risk that if this swing occurs alongside a range of fees, then you could even end up with negative equity. Cryptocurrency exchanges are frequently targeted by hackers, too. Financial crashes, major dips in the value of Bitcoin also have the potential to ruin your Bitcoin arbitrage betting options.
While arbitrage betting on sports with Bitcoins has fewer risks, any profit accumulated tends to be a lot lower than if you try to buy and flip BTC via exchanges. This form of arbitrage betting requires you to have a great understanding of Bitcoins (and cryptocurrencies in general) before you begin. If you know what you are doing, though, there is undoubtedly an array of Bitcoin arbing options open to you.