Arbitrage opportunity occurs when a trader can buy an asset in one market at a lower price and simultaneously sell it in another market at a higher price. This price discrepancy allows the trader to make a profit without any risk. In cryptocurrency, this can happen because different exchanges may have varying prices for the same coin due to factors like supply and demand, trading volume, or regional differences. For example, a Bitcoin might be priced at $30,000 on one exchange and $30,500 on another. A trader can buy it for $30,000 and sell it for $30,500, making a profit of $500.These opportunities can be fleeting, as market conditions change rapidly. Automated trading bots are often used to capitalize on these chances quickly, as manual trading may not be fast enough to secure the profit before prices align. However, traders must also consider transaction fees, which can eat into potential profits. Overall, finding and exploiting arbitrage opportunities requires vigilance and speed in a fast-moving market.
UK’s FCA to Allow Retail Investors Limited Access to Crypto ETNs
The UK’s Financial Conduct Authority (FCA) will permit retail investors to access certain crypto asset-backed exchange-traded notes (cETNs) for the