What Is Crypto Arbitrage?
Crypto arbitrage means buying a coin on one exchange where it's cheaper, and selling it on another exchange where it's more expensive — pocketing the difference as profit.
The same Bitcoin, Ethereum, or any altcoin can trade at slightly different prices across different exchanges at the same time. The reason: each exchange has its own order book, its own buyers and sellers, and its own pricing. Small gaps open and close constantly.
💡 Simple analogy: Imagine buying a book for $10 at one store and selling it at another for $10.50. That $0.50 is your arbitrage profit. Crypto works the same way — just faster, larger scale, and with trading fees.
How Does It Actually Work?
There are two main ways to do crypto arbitrage:
1. Simple (Cross-Exchange) Arbitrage
The most common type. You find the same coin priced differently on two exchanges, buy on the cheaper one, and sell on the expensive one.
- Best for beginners
- Requires accounts on at least 2 exchanges
- Main constraint: transfer time between exchanges
2. Pre-Positioned Arbitrage
The professional approach. You keep funds on multiple exchanges at the same time. When you spot an opportunity, you buy on Exchange A and sell on Exchange B simultaneously — no transfer needed.
- Eliminates the transfer time problem
- Requires more starting capital (split across exchanges)
- How most serious arbitrage traders operate
3. Triangular Arbitrage
More advanced: exploiting price differences between three trading pairs on the same exchange (e.g., BTC→ETH→USDT→BTC). No transfers needed, but requires precise calculation and speed.
A Real Example With Numbers
ATOM price on Binance: $7.312
ATOM price on MEXC: $7.324
Raw spread: 0.164%
Buy 136.7 ATOM on Binance at $7.312 = $1,000
Binance trading fee (0.10%): −$1.00
Sell 136.7 ATOM on MEXC at $7.324 = $1,001.64
MEXC trading fee (0.10%): −$1.00
ATOM withdrawal fee (on-chain): −$0.05
Net profit: +$0.59 on $1,000 invested
Annualized if executed 5× per day: ~$1,078/year per $1,000 capital
This is why arbitrage traders scale capital. The same trade at $50,000 nets ~$29.50. At $100,000 it's ~$59 per trade.
The Fees That Will Kill Your Profit
Most beginners underestimate fees. Here is every cost you need to account for:
| Fee Type | Typical Cost | Impact |
|---|---|---|
| Trading fee (buy side) | 0.10% of trade | Always present |
| Trading fee (sell side) | 0.10% of trade | Always present |
| Withdrawal fee (on-chain) | $0.05–$5 depending on coin/network | Present if transferring |
| Slippage | 0.01–0.10% on low-liquidity coins | Varies by coin |
| Total round-trip cost | ~0.20–0.25% | Your break-even threshold |
⚠️ The rule: You need a spread above 0.20–0.25% to profit. Spreads below this will result in a net loss. Use our free calculator to compute exact profit for any trade size.
Which Exchanges to Use
For beginners, the best starting setup is Binance + MEXC. Here's why:
- Binance — highest liquidity = tightest spreads = best "buy" exchange. Also has a BNB fee discount (0.075% instead of 0.10%).
- MEXC — frequently shows higher prices on altcoins vs Binance. Good "sell" exchange. Also lists many small coins not on Binance.
- OKX / KuCoin / Gate.io — add these later for more opportunities. More exchanges = more spreads to monitor.
Use CoinNavigator's live monitor to see current price differences across all 6 exchanges in real time.
Your First Trade — Step by Step
Open accounts on 2 exchanges
Start with Binance and MEXC. Complete KYC verification on both (usually takes 10 minutes). Use our partner links for a fee discount.
Fund both accounts
Deposit USDT or another stablecoin on both exchanges. Start small — $200–$500 to learn the process before scaling.
Find a profitable spread
Open CoinNavigator's spread monitor. Look for a coin with spread >0.25%. Check it says the spread is between Binance and MEXC (or your two exchanges).
Verify prices manually
Don't trust the monitor blindly. Open both exchanges in different browser tabs and confirm the prices are still different before you buy.
Execute the trade
Buy on the cheaper exchange. Then immediately sell on the expensive one (or transfer and sell). Speed matters — spreads can disappear in seconds.
Calculate your actual profit
After the trade, subtract all fees. Use a spreadsheet or our calculator to track whether you're actually making money.
How Much Can You Realistically Make?
Here's an honest breakdown based on typical spread conditions and trade frequency:
| Capital | Avg spread after fees | Trades/day | Monthly profit |
|---|---|---|---|
| $1,000 | 0.10% | 2 | ~$6 |
| $5,000 | 0.10% | 3 | ~$45 |
| $10,000 | 0.12% | 3 | ~$108 |
| $50,000 | 0.12% | 5 | ~$900 |
| $100,000 | 0.15% | 5 | ~$2,250 |
Note: these are conservative estimates. On days with high volatility, spreads are wider and more frequent. Some traders do significantly better; some do worse. Past conditions don't guarantee future results.
Top 5 Risks for Beginners
- Spread disappears during transfer — by the time your coins arrive on the sell exchange, the price gap has closed. Solution: pre-position funds on both exchanges.
- Forgetting withdrawal fees — a $5 ETH withdrawal fee will wipe out 3–4 small trades. Always pre-calculate total costs.
- Low liquidity coins — a spread on a small coin may not be executable at the listed price (slippage). Stick to top-100 coins at first.
- Exchange downtime — MEXC or Gate occasionally have maintenance windows. Never put all capital on one exchange.
- Tax implications — every trade may be a taxable event. Keep records from day one.
For a deeper dive on risks, see our article: 7 Things That Can Go Wrong With Crypto Arbitrage.
Start today
Open your first arbitrage accounts
Use our partner links for reduced trading fees — same exchange, better deal.
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