A trader in South Korea noticed something about how bitcoin was trading for 20% more on Korean exchanges than in the U.S. To make a profit, he bought bitcoin in the U.S. and transferred it to Korea to sell. Afterwards, he made tens of thousands of dollars just by exploiting what now became known as “ Kimchi Premium.“ That is the power of crypto arbitrage. It gives you profit from price differences between exchanges. In this article, I will walk you through what crypto arbitrage is, the signals, and the best crypto arbitrage platform that will help you scan multiple crypto exchanges
Keypoints
- Crypto arbitrage involves buying cryptocurrency at a lower price on one platform and selling higher price on another to pocket the difference.
- Price disparities are caused by market inefficiencies, volatility, and differences in liquidity from one exchange to another, especially during high trading.
- Delayed transfers, fees, or underprogrammed bots in real experience can wreck potential gains within no time.
- Software like Cryptohopper, Coinrule, and 3Commas do it automatically, monitor price gaps, and remove the need to be constantly monitoring manually.
- To be successful, have funds ready on multiple platforms, backtest your strategy, and use free trials to learn the process before applying real money.
Crypto Arbitrage
Crypto arbitrage is simply a trading strategy where you can buy a cryptocurrency on one exchange at a lower price and sell it on another exchange at a higher price to make a profit. I will explain further with examples.
For instance, if Bitcoin is priced at $29,900 on Exchange A, and is priced at $30,100 on Exchange B. You just bought 1 bitcoin on exchange A for $29,900 and sold it immediately on exchange B for $30,100. In the end, it gives you $200 as profit. Although you may need to deduct some money if there are transaction or withdrawal fees.
How Crypto Arbitrage Works
The aim of crypto arbitrage is clearly centred on making a profit. You can make a profit by taking advantage of price differences for the same crypto on different exchanges. Are you wondering why all exchanges don’t have the same prices? Here’s why.
#1. Price Inefficiencies Between Exchanges
The crypto market is not like traditional stock markets, which are centralised and strictly regulated. The crypto markets are more scattered, and every exchange runs independently with its own trading volume, users, and liquidity levels. This is to say that you can price a coin a bit higher or lower on different platforms at any given moment.
Sometime in 2021, during a trading session, I realised when I was flipping between Binance and KuCoin. I tried to unload some altcoins, only to realise that a coin I bought for $1.12 on Binance was selling for $1.18 on KuCoin. Even though I didn’t plan on arbitrage that day, I could not ignore the price gap that was profitable to me. So I made the transfer and made a small profit. Though it is not a huge one, it made it clear to me how often these price gaps occur, especially during busy trading periods.
You can expect these market inefficiencies when trading activities go up; this is when one exchange gets larger buying and selling orders than others. Some of the high-volume traders prefer OTC (over the counter) just to avoid fluctuations in price on public platforms. But that’s a different strategy on its own.
#2. Volatility and Liquidity: The Key Drivers
Market volatility is one of the major forces that drives arbitrage opportunities. This is because when the price changes quickly, exchanges can’t be updated immediately on the change in price. This creates a short-term opportunity for you to price a coin, maybe underprice or overprice, on certain platforms
Liquidity is another key force that can drive arbitrage. This is so because you can easily buy and sell a coin without affecting its price. It is clear that small exchanges tend to have lower liquidity, and this leads to a wider spread between buying and selling prices. This can give way to arbitrage; nevertheless, it comes with big risk because of slippages and delays.
Also, I learned the hard way to calculate fees and transfer times. This is because the small profit you have spotted between two exchange platforms can vanish after you include withdrawal fees, trading fees, and network transaction costs. For instance, that $50 gain can go down to just a few dollars or a total loss.
Also, speed matters when engaging in crypto arbitrage; you may be waiting for your crypto to transfer from one exchange to another and lose the price differences. When you now get your funds, the arbitrage window has already been closed, leaving you stuck with the coin and no profit. You need to know that crypto arbitrage is a race against the clock, not just about spotting the price difference. You need to act fast and efficiently.
Read Also: Crypto Arbitrage Explained: Best Bots & Platforms to Maximize Profits in 2025
Crypto Arbitrage Signals
I recall some years back, while trying to catch up with arbitrage opportunities between Binance and KuCoin, I set up a crypto bot to help me. One day, it highlighted a nice price difference on Ethereum, which is enough to make a decent profit. Everything looked perfect when the bot sent me that arbitrage signal, except that I was not ready. I have not connected my API keys yet, but I had USDT safe in one exchange. Before I was able to transfer funds and log in, the price gap was lost. I was very frustrated to miss such a golden opportunity, but I also learnt from it.
Crypto arbitrage signals are alerts that inform you when there’s a price difference between exchanges. Many people prefer using bots to scan prices 24/7, and when the opportunity comes, it’s like a coin selling lower on one platform than the other. The easiest part is that it sends you a buy/sell signal.
Do you know the hard part? It’s how ready you are to move when crypto arbitrage signals you.
However l, if you wish to up your game and meet up during these signals, you will need to do the following:
- Have a verified account on at least two exchanges
- Keeps your funds ready on each exchange, e.g, stablecoins like USDT and the target crypto like BTC or ETH
- You need to have aPI keys set up so you or your bot can trade fast without logging in manually.
Some of these exchanges offer free access to both real-time and historical data through their APIs. As soon as your keys are connected, you will be able to run back tests, check your balances and place orders automatically.
Tips
Ensure to keep some funds ready on each exchange you plan to use. This will save time when crypto arbitrage signals pop up. Also, try to test your strategy using historical data before you jump in with your money. By doing so, it will give you a better feeling of how your setup performs without the pressure. If you would like to set up your own crypto signal responder in 10 minutes, download our free template below.
Read Also: Top 10 Crypto Trading Mistakes to Avoid for Beginners (2025 Guide)
Arbitrage Signal Response Template
Best Crypto Arbitrage Platform
When you hear about a crypto arbitrage platform, you should know that it is all about the tool or website that helps you to find and make a profit from the price gap of the same cryptocurrency on different exchanges. These platforms are responsible for scanning multiple crypto exchanges like Binance, Coinbase, etc. They also compare the prices of the same coin across those platforms. You will be aware of where to buy low and sell high so you can make a profit. However, not all crypto arbitrage platforms are the same; some of them are known to be very fast, some have smarter automation, while some others just make the entire process easier. I have tested some platforms, and I have three of the best crypto arbitrage platforms that I can say stand out in the areas of speed, profitability, and reliability. The following are the best crypto arbitrage platforms worth using.
#1. Cryptohopper
This is what you need if you are tired of watching charts all day. Cryptohopper is a cloud-based trading bot that allows you to automate your crypto trades over different exchanges. You can skip buying and selling manually by setting up your strategies and allowing this bot to do the work. The feature in Cryptohopper that was most useful to me is the arbitrage tool. It gives you the opportunity to take advantage of price differences by spotting the price gap between exchanges. You can call it a huge time saver because it allows you to do all these without moving your crypto between platforms yourself
Pricing
- Explorer plan: $29 per month (good for beginners)
- Adventure Plan: $69 per month (for more features and flexibility)
- Hero plan: $129 per month (best for professional traders)
- Cryptohopper also offers a free trial if you are not ready to pay right away. So you test and see whether it fits your needs before you pay
Use Cryptohopper if:
- You need to save time and need the bot to manage your trade
- You are interested in crypto arbitrage, but you don’t want to track price differences manually.
- You just started trading and need something to make it easy.
- You opt for a cloud bot so that you don’t stay glued to your computer all day
What I liked
- I like the ease of use; the setup takes less than 10 minutes
- You can backtest your strategy on past data before you use your funds
- The arbitrage tool is smart; it spots price differences across exchanges automatically.
- You can buy ready-made strategies if you don’t want to build your own.
Observations
I observed that the Cryptohopper still needs warming up on speed because sometimes, before the bot finds the price gap, it’s already gone. Also, it requires easy steps to master the advanced tools; the basic steps are easy, but tweaking complex strategies takes a lot of learning.
Overall, Cryptohopper is still one of the best platforms for you to automate your crypto trading and explore arbitrage without much stress.
Tip: If you are still starting out, engage first with the free trial and practice with backtesting before using your money. That way, you learn the process safely
#2. Coinrule
This is a great place if you are interested in crypto arbitrage, but you don’t want to deal with coding. Coinrule is perfect for you because it has no-code platforms that allow creating trading strategies, like spotting price differences between exchanges or having them run automatically.
With the Coinrule platform, you can connect various major crypto exchanges, monitor prices, and set rules that trigger in due time. So with Coinrule, you don’t need to sit and refresh charts all day because the platform does it all for you.
Pricing
- Starter: free (for beginners to explore)
- Hobbyist: $29.99 per month (More control and Flexibility)
- Trader: $59.99 per month (advanced tools for active traders)
- Pro: $49.99 per month (for serious trading)
Use Coinrule if:
- You wish to automate trades without learning code
- You are interested in trying out arbitrage strategies.
- You love to have all your exchanges in one dashboard
- You are just starting, and you are looking to build trading skills gradually.
What I liked
- I love the fact that I can set up trading rules to track price differences and trade automatically.
- The interface is simple and beginner-friendly.
- The pre-built arbitrage template made it easy to start without building from scratch.
- I liked that it supports multiple exchanges, which helped me manage everything in one place.
- I liked its flexibility for both beginners and experienced traders to grow with
Observations
I observed that some of the advanced features are only available in the higher plans, and it’s not ideal for beginners. Also, it still needs to be fast in execution; it doesn’t have that speed I like during quick market changes. Nevertheless, Coinrule remains a solid option for you if you want to try crypto arbitrage without coding.
Tip: Be sure to stick with high-volume coins like BTC or ETH when using these arbitrage strategies. This is because they are easier to trade fast, and they have better liquidity across exchanges.
#3. 3Commas
You can’t speak of the best crypto arbitrage platform without speaking of the 3Commas trading platform. It’s a cloud-based trading platform that allows you to automate crypto trades across multiple exchanges. The “Smart Trade” tool features and other arbitrage features, even though there’s no dedicated arbitrage bot, make it stand out. You can spot price differences between exchanges and act on them without staring at your charts all day. It assist you in customising the bots or using the Smart Trade terminal
Pricing
Starter: $14.50 (billed annually)
Advanced: $24.50/month (billed annually)
Pro: $49.50/month (billed annually)
Free trial: available to test all plans before buying
Use 3Commas if:
- You require a flexible platform that supports auto-trading on many exchanges
- You like to use trading bots to tap into price differences
- You would rather use a single dashboard to handle all of your deals.
- You are seeking a platform that is easy to use and also has powerful features
What I Liked
- 3Commas is easy to use, and it requires just a few minutes to set up your first bot.
- I was able to connect smoothly with some major exchanges like Binance, which is vital for tracking arbitrage opportunities.
- I also find that smart trade bots are very helpful for allowing me to set stop losses and take-profit targets to manage risk.
- I like its ability to customise strategies, which gives enough flexibility to adjust trades without writing any code.
- The starter plan is very affordable and has enough features to get you started without overspending.
Observations
I observed while using 3Commas that trade execution wasn’t always as fast as I like, and this is a disadvantage during sensitive arbitrage trading. Although the basic features are easy to use, it took some time before I fully understood and adjusted the advanced tools for more complex strategies. I remember experiencing occasional platform glitches sometimes, although not serious, but they can be frustrating, especially when trying to make a quick trade.
Tip: Start with a free trial and a simple strategy by using the starter plan, especially if you’re using it for the first time. Ensure to focus on getting comfortable with the smart trade terminal and the basics. Use stablecoins like USDT for faster, low-cost trades.
I shared a video below if you want to learn more about this platform.
Is Crypto Arbitrage Still Profitable?
Although the margins are significantly smaller than in the past, cryptocurrency arbitrage is still useful in 2025. With an improvement in markets and their efficiency as well as increased competition, profiting these days depends on having large capital, using advanced trading bots, and ensuring transaction fees remain low so that one can possibly take advantage of narrow price differences.
Is Arbitrage Legal in Crypto?
In most countries, crypto arbitrage is not prohibited; however, there would need to be local restrictions and regulations on financial transactions and cryptocurrencies. Arbitrage trading is legal in the United States and even encouraged as it enhances market efficiency.
What Is the Risk of Crypto Arbitrage?
Price differences are lost quickly, and delayed shipping can turn a profit into a loss. Also, there will be transaction fees that will impact arbitrage outcomes. With every transaction, there is a fee imposed, which can spread at light speed, especially when there are platforms for trading.
Can You Make a Living off of Arbitrage?
Yes, you can earn money through retail arbitrage, but you have to be determined and plan. You have to fling operations wide open to bring a side venture into an enterprise. There are numerous success stories in this venture. Some sellers have sold $5,000 or more per month.
How Do You Find Arbitrage
Once the optimal odds have been determined, calculate the assumed probability. To get decimal odds, divide 1 by the odds. All the results’ assumed probabilities are added together. If the result is less than 1, then arbitrage exists.
References
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