Once you decide to take advantage of crypto arbitrage, you need to evaluate and register on the most advantageous crypto exchanges. Some exchanges, like Bitfinex, require you to get your account verified (which takes approx. 6-8 weeks) and a minimum deposit of $10,000 to start trading. Others are less strict in their methods, yet, most of them will ask you to pass KYC/AML.
The most critical variables when choosing an exchange for crypto arbitrage are:
- Fees. High or low trading, deposit or withdrawal fees can make or break the deals. Go for low fee exchanges whenever possible.
- Geography. Some exchanges or some of their features may be restricted or limited in your area, so you need to be aware of it before making a trade.
- Reputation. See what reviews and other people are saying about certain exchanges before you deposit your funds. There are many shady and unregulated platforms in the industry, so it is better to play it safe than sorry.
- Transaction times. Some blockchains allow for quick transactions, while others can up to an hour or more during peak times.
- Withdrawal times. Some exchanges make manual fund withdrawals which occur only once a day or so, so be aware and understand the rules before entering one.
- Account verification. Some exchanges may not allow you to withdraw funds or fully use the markets before you verify your account, which can take several days or even several weeks at a time.
- Market liquidity. Not every exchange has enough liquidity, especially if you’re looking to buy or sell large quantities of digital assets.
- Wallet maintenance. Most arbitrage opportunities occur due to wallet maintenances in certain exchanges, so make sure to be aware of whether you can withdraw or deposit the crypto assets of your choice.