ASingapore-based hedge fund is getting in on what many cryptocurrency investors have been partaking in for years--Bitcoin arbitrage trading. A product of Vulpes Investment Management, Bloomberg reported that Kit Trading has raised $10 million specifically for a BTC arbitrage trading fund.
Apparently, things have been going well--the fund is on track to meet its goals by early next month.
Indeed, Kit Trading (which has traditionally invested in property startups, real estate, private equity, and life science) has a history of performing positively, returning 17.2% and 11.4% in 2017.
Bitcoin is a "Maybe", Arbitrage is a "Yes"
Despite the success of the BTC arbitrage fund, Vulpes CEO Steve Diggle does not seem to have been caught up in the crypto craze, saying “we are agnostic.” He continued: “What we firmly believe in is arbitrage, and arbitrage opportunities abound in this nascent asset class.”
If one has the means to pull off Bitcoin arbitrage trading, the practice can be quite profitable. Depending on local inflation, the price of Bitcoin can vary quite a bit from Exchange to exchange--during the height of the Bitcoin fever that peaked in mid-December 2017, Bitcoin was selling at an average of $2,500 higher than in the rest of the world, a special price tag that was eventually dubbed the 'kimchi premium'.
Crypto Hedge Funds Continue to Increase in Popularity
Over the past year, investment firms that would have laughed at the thought of crypto-based hedge funds have begun participating in the very same crypto investment practices that they scoffed at in the past.
Indeed, crypto hedge funds hit the market with a bang in 2017. The year started with just a handful--Polychain and Metastable Capital, to name two--but by the end of the year, more than 95 cryptocurrency-based hedge funds were operating worldwide.
Indeed, cryptocurrency’s foothold in the mainstream investing world has garnered increasing strength, attracting more and more institutional investors. Along with the blossoming of crypto hedge funds, the rising popularity of crypto futures trading and regulated crypto exchanges has given investors more confidence in volatile crypto assets. Undoubtedly, we will continue to witness the appearance of more crypto hedge funds throughout 2018.
ASingapore-based hedge fund is getting in on what many cryptocurrency investors have been partaking in for years--Bitcoin arbitrage trading. A product of Vulpes Investment Management, Bloomberg reported that Kit Trading has raised $10 million specifically for a BTC arbitrage trading fund.
Apparently, things have been going well--the fund is on track to meet its goals by early next month.
Indeed, Kit Trading (which has traditionally invested in property startups, real estate, private equity, and life science) has a history of performing positively, returning 17.2% and 11.4% in 2017.
Bitcoin is a "Maybe", Arbitrage is a "Yes"
Despite the success of the BTC arbitrage fund, Vulpes CEO Steve Diggle does not seem to have been caught up in the crypto craze, saying “we are agnostic.” He continued: “What we firmly believe in is arbitrage, and arbitrage opportunities abound in this nascent asset class.”
If one has the means to pull off Bitcoin arbitrage trading, the practice can be quite profitable. Depending on local inflation, the price of Bitcoin can vary quite a bit from Exchange to exchange--during the height of the Bitcoin fever that peaked in mid-December 2017, Bitcoin was selling at an average of $2,500 higher than in the rest of the world, a special price tag that was eventually dubbed the 'kimchi premium'.
Crypto Hedge Funds Continue to Increase in Popularity
Over the past year, investment firms that would have laughed at the thought of crypto-based hedge funds have begun participating in the very same crypto investment practices that they scoffed at in the past.
Indeed, crypto hedge funds hit the market with a bang in 2017. The year started with just a handful--Polychain and Metastable Capital, to name two--but by the end of the year, more than 95 cryptocurrency-based hedge funds were operating worldwide.
Indeed, cryptocurrency’s foothold in the mainstream investing world has garnered increasing strength, attracting more and more institutional investors. Along with the blossoming of crypto hedge funds, the rising popularity of crypto futures trading and regulated crypto exchanges has given investors more confidence in volatile crypto assets. Undoubtedly, we will continue to witness the appearance of more crypto hedge funds throughout 2018.
In general, crypto arbitrage is legal in most countries, but traders should be aware of local regulations and laws governing cryptocurrencies and financial trading. In the United States, arbitrage trading is considered legal, and it is even encouraged as it helps to increase market efficiency.
Crypto arbitrage refers to a trading strategy in which traders take advantage of different exchange rates for the same digital asset. Generally, crypto exchange rates differ from one to another due to the differences in supply and demand.
Arbitrage Trading Bots is one of the most popular. These bots and automated tools examine the cryptocurrency values across various crypto exchange markets. They investigate the changes and invest themselves by exploiting discrepancies.
Although crypto arbitrage is a low-risk strategy, it doesn't mean that you won't lose money. Before making a leap towards a crypto arbitrage strategy, it is important to obtain appropriate financial advice and only invest what you can afford to lose. Be familiar with the process of cryptocurrency trading.
Crypto arbitrage is a great way to generate passive income in the cryptocurrency markets. The key is having funds across multiple exchanges and acting fast when opportunities arise. With the right tools and strategies, arbitrage trading can be highly lucrative.
Price differences can disappear quickly, and slow execution can turn a potential outcome into a loss. Moreover, transaction fees can impact arbitrage outcomes. Every trade involves a fee, and these can add up, especially when trading across multiple platforms.
Arbitrage with the proper mastery and skills is a great way to create profit. For the complete guide on how to source your products to resell and find them on Amazon FBA, you can watch this video we create.
Crypto-arbitrage can be profitable in the short term due to price discrepancies across exchanges, but long-term success is uncertain due to market efficiency improvements. Successful crypto-arbitrageurs exist, leveraging technological advancements and rapid market movements to capitalize on arbitrage opportunities.
Despite the recent crash in crypto markets, crypto arbitrage has continued to provide healthy returns to clients. A realistic expectation is a net profit of 1% to 1.5% per trade, which can accumulate to over 100% per annum, depending on the number of trades performed over the year.
One of the primary disadvantages of arbitrage funds is their mediocre reliability. As noted above, arbitrage funds are not very profitable during stable markets. If there are not enough profitable arbitrage trades available, the fund may essentially become a bond fund, albeit temporarily.
Arbitrage trading is not only legal in the United States, but is encouraged, as it contributes to market efficiency. Furthermore, arbitrageurs also serve a useful purpose by acting as intermediaries, providing liquidity in different markets.
They monitor prices in real-time and execute trades instantly when profitable opportunities arise. By leveraging advanced algorithms and technology, arbitrage bots can capitalize on even the slightest price differences, enabling traders to generate profits with minimal risk.
There are multiple ways to spot arbitrage opportunities. You can manually monitor cryptocurrency prices on different exchanges or employ a crypto arbitrage scanner. Crypto arbitrage scanners, available as websites or apps, track cryptocurrency prices across exchanges and notify you of potential arbitrage opportunities.
New trends in cryptocurrency arbitrage. Automation is the only viable way to engage in crypto arbitrage in 2024. With competition speeding up the price convergence, finding opportunities is possible but it takes a lot of time and unwavering attention from a retail trader.
Arbitrage trading is not only legal in the United States, but is encouraged, as it contributes to market efficiency. Furthermore, arbitrageurs also serve a useful purpose by acting as intermediaries, providing liquidity in different markets.
In the United States, arbitrage is legal. However, there are some restrictions on how it can be done. For example, the Securities and Exchange Commission (SEC) has rules that prohibit certain types of arbitrage. These rules are designed to prevent insider trading and other forms of market manipulation.
While arbitrage bots can generate profits, their potential for profit is limited. Price discrepancies between exchanges are usually small, meaning that the profits generated by these bots are relatively small. Additionally, as more traders adopt this strategy, the opportunities for profitable trades may become scarcer.
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