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How to Find the Best Crypto Arbitrage Opportunities with a Scanner A crypto arbitrage scanner is an analytical tool that helps you capitalize on price differences between crypto exchanges. Arbitrageurs buy from an exchange with the lowest price and sell on an exchange with the highest price to exploit the difference in value of identical or similar crypto assets between two exchanges. How does it work? You don’t need a crypto arbitrage scanner to figure it out, but it’s helpful when deciding whether you should go through with your plan. Understanding Crypto Arbitrage Crypto arbitrage is when you buy and sell an asset in different markets at the same time. This is done to exploit temporal variations in prices of similar or identical crypto assets. A scanner can help you find opportunities for these trades. For example, let’s say bitcoin has two exchanges available: one where BTC trades for 10 and another where it trades for 9,000. You would use your scanner to check those two exchanges regularly. If the price on both exchanges stays within 1% of each other over a long period of time, it’s likely that there is no arbitrage opportunity worth exploring. However, if the prices are within 5% of each other then an arbitrage opportunity may exist. The goal is to buy from exchange A and simultaneously sell from exchange B until the prices converge. When they do, the trader will move their funds back to exchange A and repeat this process again. -The term arbitrageur comes from the French word arbitre which means judge. Traders who practice arbitrage are doing so because they want to judge whether this strategy is profitable enough to keep performing.
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