Bitcoin Forum

In recent times, there are some good arbitrage opportunities I can see on different platform. Recently, I tried to have an arbitrage on COTI/USDT pair which seems lucrative and also between two best exchange. Buy at Kucoin and sell in Binance. There was a spread of 23% almost which seems very lucrative. I purchased from Kucoin and when I wanted to withdraw, it was suspended. By this time, I have lost around $30. Before you go for arbitrage, make sure everything is okay. Remember, there is a reason behind the spread.

To make money on arbitrage you need to work differently ;) I am not an expert in these matters, but i see that there are many dangerous moments in your scheme.
In arbitration, the most important thing is the presence of large reserves. In arbitrage, earning 1% on a deal is already very good.

In the case above, everything was fine. 23% spread isn’t a small amount of course. If you could invest $1000 and make a successful trade, easy $230 or at least $200 was there. That was certainly a good deal but there are lots of other factors which needs to be checked.

The reason was simple.

Why Kucoin have the big spread than Binance almost 23% because suspended and a holder on Kucoin selling their token more cheaper on there since everyone can withdraw and decide to just dumb the token/coins.

Anyway, you was realized a few minutes after buying cant withdrawl how you can lose 30$? did you not selling ont he same price again or the gap spread orderbook between buy and sell was pretty high on kucoin ?

Never try to do arbitrage trading when you see huge difference in the price range especially with reputed exchange because there might be issues with withdrawals or deposits for particular coins on such occasions. If you want to do arbitrage then just set the margin to 5% and only choose the exchanges where the withdrawals processed in real quick not for hours.

Importantly choosing an altcoin for arbitrage is not really a good idea.

Can you provide a little explanation for why that's not a good idea ?
Meanwhile, arbitrage is one of the trading tips that can provide profit to trader, meaning that arbitrage is a way for day trader to profit from trading.

One of the mistakes that arbitrage trader often make is rushing to buy crypto asset without paying attention to some important point such as the functionality of a wallet between two exchange. This will prevent users from experiencing the same fate as the OP. I hope the OP makes this incident a valuable lesson in the future.

Not enough liquidity is one of the main reason why we shouldn't have to choose a random altcoin for arbitrage. Because we can see the price difference using the price trackers but once we entered into that exchange the order book doesn't have enough volume to trade for that price we calculate so we end up paying withdrawal fee and also need to wait for hours to withdrawal get proceed.

Oh wow, sorry to hear that LM, do you mean that Kucoin suspended the trading of COTI? or your account has been suspended? Maybe Kucoin detected something that's why they suspended either COTI or your account? Anyhow, takes for sharing, traders specially newbies think that arbitrage is an easy way to make money due to swing price and spread, but there are a lot of factors involved.

Guys, arbitrage is not that easy as you think it may be. Usually bots don't allow others to take advantage of arbitrage opportunities. Such bots are using API to trade, to see the order books, to compare the price of the same pair between two or more exchanges and they are also using API to transfer coins fast from exchange to exchange.

Also, note that when an exchange has disabled withdrawals or deposits, there are usually big premium differences and also the books are very thin and you can get trapped very easily.

indeed, because arbitrage is not an easy strategy, we must calculate in all situations,
such as transactions fees and many more
so, for the OP i hope you will learn more about arbitrage strategy before you try to do it
regards

I do agree. It is very important to know the information about two exchanges before doing arbitrage. Although arbitrage is commonly very promising, we can get many profits in a short time by arbitrage.
I commonly consider these:
- Withdrawal term and condition of initial exchange, including the need to KYC or not and another requirement for withdrawal
- Fee of WD
- Speed of withdrawal
- Availability of the coins for withdrawing
- Deposit speed in the addressed exchange
- Deposit availability of the token in addressed exchange
- DIsntic of the price between the two
-think about the price at least one hour later

The most common problem to encounter when using arbitrage trading and a reason also why having this strategy will drive to losses instead of seeking to gain more.

I experience this before as I was expecting great but somehow, I was at a big loss. That seems not really works for a casual trader but might possible for those who did this full-time. Before start using this, it is best to think if we are capable of doing this or choose the known coin to trade. It can be also a factor that the deposit/withdrawal will be paused/unavailable.

@OP, if you continue doing this much better to choose BTC or better check first the availability of coin first.

Of course, at least make sure about some crucial things such as:
1. Transaction fees
2. Withdrawal fees
3. How long the delivery time
4. Check the current information on the exchanges (maintenance, suspend WD/Depo, etc)

This is very helpful to ensure the arbitrage to be successful. If it looks too risky, it is better not to do. There are many people who just waste their time because arbitrage cannot be successful because of fundamental factors. They forget to check everything first before doing the arbitrage. Arbitrage should be successful if we can be more careful and not in hurry.

This has been going on for years.  Anytime there is a huge percentage is because of a withdraw issue usually.  People look at the numbers and buy or sell but get stuck on step 2.   Good post that newer traders should put in their back pocket.

Thank you for being reminded.
indeed Arbitrage trading is one of the best ways to increase your entire crypto portfolio in no time. However, finding such an opportunity was very difficult.
if there is a very high price difference between exchanges we should investigate it first.

May I know what's the reason behind?

Kucoin seems to be a legit site, they would not just suspend withdrawal of a token you already own without a valid reason.
The statement you used is "Be aware about arbitrage", this is a general statement when it does not happen in all sites, it's only Kucoin has a problem with this based on what you shared.

Its common that exchanges put the altcoin's wallet under maintenance and temporary block for withdrawal on most of the cases so if they have such coins they can trade it but it is not possible to request for the withdrawal when it is under maintenance.

What he means was what is the reason behind the maintenance. There is always a reason for a maintenance such is bug on code of coin or error in synchronizing the wallet. The exchange should trading if ever they will have an upcoming maintenance about it or atleast give notification to traders.

@OP, Do you check the volume on the order book before you do the arbitrage trading?

This coin actually has a good trading volume, per https://coinmarketcap.com/currencies/coti/markets/, it's trading volume is currently at $17,789,298 and more or less $800k trading volume in Kucoin, so this is not a shitcoin IMO.

Lol, I was once into this but learned the hard way later, the fact is there are other things that may delay you from earning with this strategy, buying less on a exchange and selling high on another don't always go smooth, sometimes you will be stuck due to slow withdrawal and before the transaction go through the price would have adjust

That's the risk to consider, it would be acceptable if the price will not dump even if there's a maintenance but if they intentionally do that, then you have no choice but to accept their loses, sometimes we think we found an arbitrage opportunity and we thought they don't know it, but in reality it's just a trap to attract us to buy their coins.

For sure exchange will announce about the maintenance on their social media channels or atleast in their website at some place but what I exprienced is they will announce about the maintenance but don't want to mention about how long it will last long with shit coin wallets so it may be even in the maintenance mode forever.

Cryptocurrency arbitrage is practically indistinguishable from ordinary arbitration. First, you need to decide on the exchanges and analyze their work. On some exchanges, the withdrawal of some coins is not possible. It is better to choose a popular coin for these purposes so that there are no problems.

Network load issues are not the deciding factor in arbitrage. The main problem is that you simply will not be allowed to withdraw such a coin, which is sold at a lower price on this exchange. I faced a similar situation when withdrawing the DIA coin from the Kucoin exchange to Binance, when my withdrawal was simply blocked by the exchange.

That is true, there is always a reason for the spread and thus the reason to also understand why there is such a big/small difference in price. In some case scenarios, it could be suspended withdrawal, or suspended deposit maybe due to platform upgrade or exchange maintenance, therefore the reason most times arbitrage hardly works, but when you see a good one and everything falls in place, then it's worth the risk. Another thing is, carrying out the arbitrage with good coins is very important, such that, if in the cause of things the price dumps, then owing to the team's efforts and hard work, it will pump back again later on, or you can still sell at a little loss depending on what you want.

A few years ago. when I was not yet so experienced in the cryptocurrency world, I sat on one exchange and on this exchange the price of coins was constantly much lower, with the Ethereum price of $ 300, it cost $ 250 there, then I could make enough money on this, but I thought in a completely different way, "It can't be so easy", but now I understand that I missed enough profit, this opportunity was about 3-4 months, then the rates stabilized with the growth of the exchange popularity.

What a fool I was ((