What does cryptocurrency arbitrage mean (Can you still make money by arbitrage)?

What does cryptocurrency arbitrage mean? What does cryptocurrency arbitrage mean?

In the field of blockchain, there are usually two types of people who convert digital assets into other currencies. For example, Ethereum can be used as collateral to borrow stablecoins like DAI and USDC, while EOS can be used as collateral to borrow ETH or ERC20 tokens and other cryptocurrencies. If a user wants to buy ETH with Bitcoin, they need to withdraw it from the Huobi exchange and deposit it into the corresponding address. Another user’s wallet will also contain some other cryptocurrencies (such as USDT, Dai), and when someone wants to transfer 1 BTC to another account, it will be sent back to their own address. So generally, the term “digital” refers to “digital RMB.” In other words, digital currencies are a type of virtual commodity distributed to people in the form of electronic cash—a new type of legal currency issued based on computer code.

Can you still make money by cryptocurrency arbitrage?

Can you still make money by cryptocurrency arbitrage?

Today, let me tell you whether cryptocurrency arbitrage can actually make money or not. Specifically, it can be understood as follows.

1. What is Defi (Digital Token Transfer)?

The transfer of digital currencies is a virtual asset transfer completed through blockchain networks. For example, when we use Bitcoin for transactions, an address or two tokens will be generated on the chain as an exchange. However, if the token has been noted down by the receiver, it cannot be received again once it has been sent out. Therefore, if a user wants to exchange it for other encrypted assets, they must first convert it with ETH or BTC.

2. How to buy and sell digital tokens?

The process of splitting and transferring digital RMB is very simple and can be completed with just a few hundred yuan in fees. 2. Why do you need to arbitrage to make a profit?

In the cryptocurrency world, “arbitrage” means selling the funds directly to investors or third-party custodial institutions after withdrawing some digital currency from the exchange. This method does not necessarily guarantee a high return on investment and is not without risk, because when you want to buy a certain digital currency and use it for interest payments, the digital currency you provide will be sold to your friends at a certain ratio. This will attract more people to invest their funds in the platform for corresponding arbitrage activities.