We will focus on crypto trading bots with an arbitrage function.
To break this down we have the following headlines
- What is an auto crypto arbitrage strategy?
- Best auto crypto arbitrage trading strategy and highest ROI
- Risks with auto crypto arbitrage trading
What is Auto Crypto Arbitrage Strategy?
There are basically 2 different ways to execute your crypto arbitrage trading strategy.
Auto VS non-auto trading strategy
- Auto trading means that you trade manually which means you sit and click in front of the computer or mobile device.
- Non-auto trading means that you set up predetermined rules and let a bot trade automatically for you once any of these rules are triggered by the market.
Almost any crypto trading strategy is possible and maybe even preferably automated with a bot.
What is arbitrage trading?
An auto crypto arbitrage strategy is a computer program that examines and compares coin prices across exchanges in order to make automated trades that take advantage of price discrepancies.
This will trigger the bot to buy ETH on Kraken and quickly sell it on Binance in order to make a small profit.
See example illustrated in the picture below.
- Alice deposit $5.000 to Binance and buy 0.1 Bitcoin
- Alice transfer 0.1 BTC to Kraken and sell it for $5.010
- Now, Alice and transfer the $5.010 back to Binance and buy 0.1002 BTC
Best Automated Crypto Arbitrage Trading Bots for Binance
In the table below, we have listed the best auto crypto arbitrage trading bots allowing arbitrage strategies that can yield a high ROI.
Also, don´t forget to read and understand all the risks associated with crypto trading bots and arbitrage trading, which we have addressed further in the article.
To make a successful arbitrage bot, you need to find:
- Crypto exchanges with the lowest fees since each trade will gain a tiny percentage
- A central software allows you to trade on multiple large exchanges with a lot of trading volume(liquidity) and low crypto trading spreads. It takes too much time to move the funds around yourself, so you must operate from a single software handling multiple accounts.
Check our article about crypto trading platforms with the lowest fees to find a good trading platform.
As you can see below, both Cryptohopper and Coinrule let you connect to several crypto exchanges, and both supply you with automated arbitrage trading bot templates.
Cryptohopper Crypto Trading Bot - Arbitrage Strategy
Cryptohopper crypto trading bot lets you copy traders, manage all your exchange accounts in one place, use market-making and exchange/market arbitrage and simulate or back-test your trading strategies. Cryptohopper has many pre-programmed crypto trading bot templates you can use, including arbitrage templates.
With Cryptohopper, you can exchange arbitrage between exchanges without sending funds from one exchange to another.
Connect your exchanges with funds via an API. Then, enable Exchange Arbitrage and let your Cryptohopper automated bot search for arbitrage opportunities.
In addition, you get fast, automated trading and portfolio management for Bitcoin, Ethereum, Litecoin, and 100+ other cryptocurrencies on the world’s top crypto exchanges.
Supported exchanges are Binance, Binance US, Kraken, Crypto_com, Kucoin, Bitfinex, Bitpanda pro, Coinbase pro, Bittrex, Poloniex, EXMO, Huobi, and OKEX.
Read more about the Cryptohopper arbitrage trading strategy.
Coinrule Crypto Trading Bot - Arbitrage strategy
Coinrule is a crypto trading bot and platform which empowers traders to compete with professional algorithmic traders and hedge funds. With Coinrule, no coding expertise is required, and there are already pre-programmed arbitrage templates.
Supported exchanges: Binance, Binance US, Poloniex, Bitpanda Pro, Coinbase Pro, Bitstamp, HitBTC, Kraken, Liquid, OKex
Read the full Coinrule review.
Bitsgap Crypto Trading Bot - Arbitrage strategy
Bitsgap is an all-in-one crypto trading platform for trading, trading bots, providing signals, and much more.
The sign-up process is a straightforward 2 minutes process with email verification. In addition, Bitsgap provides a 7-day free trial in which the trader can enjoy several features free of charge.
Read more about the Bitsgap crypto arbitrage bot for the highest ROI.
Supported exchanges: Coinbase Pro, Huobi, Kucoin, OKX, Bybit, Binance, Bittrex, Bitfinex, FTX, Kraken, Poloniex, Gemini, Gate.io, HitBTC, Liquid
Read more about Bitsgap in our Bitsgap trading bot review.
Pionex Crypto Trading Bot - Arbitrage strategy
Pionex is a cryptocurrency exchange with built-in free crypto trading bots.
Here, you will access 12 free pre-programmed unique crypto trading bots. These crypto trading bots allow you to automate your investing strategy.
Read more about the Pionex crypto trading arbitrage bot.
Risks with Automated Crypto Arbitrage Trading
As for any investment, there are crypto trading risks associated with auto crypto arbitrage trading with bots.
However, if you are aware of and address the risks, it´s a much higher probability that you can actually manage them and quantify them.
Here are some risks we have identified
- Execution risk – Arbitrage opportunities are short lived and you almost have to execute the trades simultaneously
- Uptime – Since you interact with one seller and one buyer on 2 different exchanges at the same time all things must be connected and no downtime is allowed. In addition, you probably use a crypto bot software to perform your arbitrage strategy.
- Counterparty risk – Since you have to deal with one buyer and one seller at the same time there is always a counterparty risk
- Liquidity risk – If you buy a crypto on one exchange the same position must be liquid to sell on the other exchange.
- Exchange fees – Arbitrage trading involves a lot of transactions with a small portion of profit on each trade. There is a risk the fees will eat up all profit.
More Automated Trading Strategies with a bot
Many crypto trading strategies are possible to automate by using a crypto trading bot software.
For example, we also have a summary of the best-automated crypto day trading function for the most profit.