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The fact that each Bitcoin exchange shows a different price for Bitcoin has given birth to the arbitrage phenomena. In this post I’ll explain exactly what arbitrage is and how it is conducted
The difference between prices is $400, and this is quite a decent opportunity for arbitraging. Let’s say, you buy 100 bitcoins on binance at the rate of $7000 each, and subsequently you sell them on bituary.net at the rate of $7,400 each.
In a perfect world you’d make $400 per Bitcoin.
Let’s get down to the math:
Number of Bitcoins bought in binance — 100
Price of each Bitcoin — $7000
Total expenses — $7000 * 100 — $700000
Number of Bitcoins sold on bituary.com — 100
Price of each Bitcoin — $7,400
Total revenue — $7,400 * 100 = $740000
Total profit — $740000 — $700000 = $40000