We pursue the highest returns at the lowest risk possible.
Whilst Crypto Arbitrage takes every precaution to minimize the risks our clients are exposed to; unfortunately, we cannot do away with them together. There will always be factors outside our control, and therefore we cannot state crypto arbitrage is a wholly risk-free endeavour. Consequently, it would be best if you considered the below-identified risks so that you may decide whether or not you are comfortable using Crypto Arbitrage services. Therefore, please ensure you objectively assess the risk level compared to the potential reward level before deciding.
Risk 1: Asset price fluctuation in our inter-exchange markets
Although arbitrage trades in our inter-exchange markets provide numerous price differential opportunities that Crypto Arbitrage is perfectly poised to exploit, there is no guarantee that they will remain in place long enough for us to capitalize from them. For example, if exchange A sells USDT at 1.00 but exchange B sells it for 1.02, there is a 2% gain to be had. Crypto Arbitrage will then initiate buying USDT on exchange A and then transferring it to exchange B to realize the profit; however, given the time it takes the USDT to reach exchange B, the arbitrage gain may increase or increase decrease. Sometimes, the arbitrage gain may go negative, resulting in a negative trade. Although this does not happen often, it is certainly a potential outcome to be aware of.
Risk 2: Foreign Currency fluctuations in our FIAT markets
Our FIAT markets provide extensive price differential opportunities that we can exploit through our network of subsidiary companies and partnered intermediaries in the countries where these gains are possible. However, the risk of foreign currency fluctuations in these markets means that arbitrage gains can increase or decrease.
Risk 3: Counterparty risk
Crypto Arbitrage maintains balances across numerous cryptoasset exchanges, and we do this to ensure that we can quickly and efficiently execute arbitrage trades in our inter-exchange markets. Although we take every precaution to protect our accounts, namely by using multi-factor authentications, the fact of the matter is that balances are not moved to cold storage and remain in hot wallets on each exchange. Unfortunately, this opens up counterparty risk: namely the risk of suffering a loss if one of our exchange partners suffers a third party hack and funds are stolen. Although this is an unlikely scenario, as Crypto Arbitrage only works with the world's best cryptoasset exchanges, it is always a possible outcome and one that remains out of our control. Please see our list of exchanges for more information on which exchanges we use to execute arbitrage trades.