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Author: Admin | 2025-04-27
Are multiplied, as shown:BTC/USD x USD/ETH x ETH/BTC = ?31,500 x 0.00093 x 0.03085 = 0.90375Since the product is not equal to 1, an arbitrage opportunity exists.Firstly, BTC is acquired by selling USD. Assuming $10,000 were sold, then we would receive an equivalent of 0.31746 BTC**If 31,500 USD = 1 BTC, then10,000 USD = [(10,000 USD x 1 BTC) / 31,5000 USD] = 0.31746 BTCThe acquired BTC is instantly sold to buy ETH. Using the given rate of ETH/BTC, the quantity of ETH that can be bought is 10.2904**.**If 0.03085 BTC = 1 ETH, then0.31746 BTC = [(0.31746 BTC x 1 ETH) / 0.03085 BTC] = 10.2904 ETHFinally, the 10.2904 ETH is sold to buy back USD. Given the market price of USD/ETH, we would receive a total of 11,064 USD***.***If 0.00093 ETH = 1 USD, then10.2904 ETH = [(10.2904 ETH x 1 USD) / 0.00093 ETH] = 11,064 USDThe difference between the USD obtained after selling ETH and the initial USD sold to buy BTC determines the trade’s profit.Profit = $11,064 – $10,000Profit = $1,064Note: The example discussed is an ideal one without considering the fee incurred. However, we would highly recommend you calculate the net profit (fees deducted) that can be made before getting into the trade.Cryptocurrency Arbitrage and FeesFees are another vital point of consideration apart from profit. Especially as arbitraging involves the execution of trades and the transfer of funds in every opportunity, the overall fees could slow the growth of your account in the long
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