Arbitrage the act of profiting from spread between the bid and ask across several exchanges order books, can be a interesting and highly profitable venture. Albeit fraught with complications, nuances and roadblocks.
Tracking down a profitable spread is the first of your issues, and thankfully there are many apps out there which aim to provide this service. Intrigued by returns generated by arbitrage funds in the crypto space, I went balls deep this week on arbitrage and decided to report back on what I found out there.
Try it here - https://coinigy.com
This is a beast of an application, enabling you to trade from one window across multiple exchanges seemed the ideal tool for an arbitrage trader.
I've been an early adopter of coinigy and followed the development for a while, the latest version is quiet comprehensive and offers plenty of useful information to check order books across exchanges from just one easy to use list.
Inside of coinigy is the arbmatrix, a scanner which looks for profitable spreads and provides you with some information on the bid and ask. I found the tool pretty useful although with no customisation features and very clunky interface, it didn't really hold out.
- Easy access to most major exchanges order books
- Well optimised application, uses less resources then directly loading most exchanges
- Arb matrix tool little hard to actually track down and find opportunities without doing lots of laborious scanning, there is no list of all opportunities so you must check each pair yourself (impractical)
- Does not include round trip fees (tx fee, withdraw and exchange fee etc) so a little fuzzy numbers
- Numbers did not update from latest trade, so sometimes is lagging actual trading level
4 out of 10.
Coinigy has a lot of potential, but I would find it hard to clearly ascertain a profitable trade without hours and hours of cycling through pairs. A completely arduous task that a computer can easily handle, poorly designed in this aspect. Otherwise a pretty good app, if not quiet overpriced for what it offers.
Try it here - http://coingap.org
This is a great website that interfaces the coinmarketcap api into a neat form for your ease of use to scan applicable exchanges and coins, it even has filters for volume and I was able to find 5% in arbitrage with this tool rapidly.
Much easier to use then the arbmatrix previous mentioned, and also note worthy of double tripping. Meaning the first route can be reversed (eg buy on bittrex, sell on binance, then reverse buy on binance sell on bittrex) for double profits.
Spotting these opportunities makes all the difference when running arbitrage, and when fully automated seems is the most optimal method.
- Free, easy to use, awesome interface
- Filter by volume, coin and exchange
- Doesn't factor in exchange fees
- No notification service, you must keep checking yourself
8 out of 10
Easily one of the best arbitrage tools on the net, and it's free! With some small modifications it could be made really useful, although nothing is stopping avid traders from hacking together a cron job that monitors their favorite pairs and pings them on new opportunities, an easier entry point for scrapping possibly then signing up for a full coinmarketcap api.
Quick and light weight, easy to spot the trades.
Simple Crypto Arbitrage Spreadsheet
it's a google spreadsheet that uses cryptonator and some plugins to make a highly powerful tool. Whilst partially free (the spreadsheet is kindly provided open source, although API access is premium)
The spreadsheet will plot out the spread and volume so you have some idea of profit and any snags on illiquid exchanges in order to ensure viability of the idea. The only downside is no search or scan facility again so you must go through checking pair by pair.
This is quiet a nag as you want to be trading not scanning, we should be able to leave that for a script to do and focus on taking profit.
That said for a free tool it is a very useful and interesting use of google sheets, which can be added to and modified if you wish.
- Free, and editable to be customised however you want
- Shows volume so you can asses liquidity
- No scanner, you must go through pair by pair
- Premium API access required, not free.
6.5 out of 10
Crypto Arbitrage Scanner
This is one awesome command line based tool that really does a fantastic job for not only standard arbitrage by triangular and quad! Giving you configuration options of up to 4 exchanges, the tool scans the order books and lists the results in the command line terminal.
At time of writing the tool was working, although unable to find any profitable trades. After a few spins of the wheel though, the bitfinex API rate limited us and we couldn't keep scanning.
The tool is fully open sourced and written in node.js, so taking it apart and customising it or using it as a base for your project shouldn't be such a big deal. A lot of thought when into engineering this project clearly, and forking it to take it further with more exchange if you were so inclined could make it a good starting base.
- Free, open source software
- Checks for triangular arbitrage and even quad routes
- Supports 4 exchange scanning
- Getting rate limited on bitfinex currently due to using old API access
- Not enough exchanges or coins to find profitable arbitrage consistently
5 out of 10
There are lots of tools out there, and ultimately the perfect tool for arbitrage is going to be one you have crafted yourself, or worked closely on with a developer if you are not a software engineer.
It can be spreadsheet based or using Node.js, as we have seen there are plenty of options. Even just going by data aggregated from coinmarketcap by coingap.org has proved profitable during these sideways markets.
As always with arbitrage, tread carefully. Sometimes a 14% gain that seems unnatural, is there for a reason. Often case being the route is jammed, a wallet is offline or the withdraw process is horrific.
There is often a catch as to why the spread exists, if you are able to see the silver lining and use these catches to your benefit you can take home profit without opening yourself to leverage risk, or margin management and just directly trade spread. Certainly a preferable strategy in times of low volatility when there is not a trend to follow and tight range bound consolidation.
Always remember to write a check list before executing your arbitrage trade, run the whole route through from A to B. Check each part of the route before committing funds, and start with dipping your toe in before putting a huge amount through, remember a good arbitrage can be run again and again - not just once. And compounding those gains is where the big multiplications come from.
If you find any useful tools you feel were missed from our guide, please share your thoughts and leave a comment below