as many have commented that bitcoin arbitrage will not be profitable because you will be charged multiple fees, so it cannot cover the transferred capital.
Likewise, with the most profitable altcoin, it may only be 1% to 2%, considering that it depends on the condition of the altcoin trading volume and the spike that is generated in a short period of time. However, if you are doing arbitrage when conditions are hunting for high prices in one particular market, then you experience a delivery jam or wait for several confirmations, it will be very risky.
I don't get how withdrawal fees will hinder arbitrage trading. I will explain how it can be done without actually withdrawing and depositing BTC.
1- Imagine you see BTC being sold at $35k at one exchange. (exchange A)
2- You see people buying BTC at 36k at another exchange. (exchange B)
Now what you need to do is really simple. You will borrow 1 BTC from exchange A at $35k and then you will short sell 1 BTC at exchange B at $36k. Now once both the trades are completed, you just need to deposit 1 BTC back to exchange B which you can do with ease since you have that in exchange A. Did I miss something here guys?