Crypto arbitrage

Arbitrage is buying an asset in one market and simultaneously selling it in another where the price is higher, to profit from the difference. In crypto, price gaps open up between exchanges, between spot and futures markets, between different trading pairs and between centralised and decentralised exchanges.

Classic examples include buying bitcoin on an exchange where it is cheaper and selling where it is dearer, or "triangular" arbitrage across three pairs on one exchange. Cash-and-carry or basis arbitrage involves buying spot and selling futures to capture the gap between them or the funding rate.

In practice, obvious opportunities are captured within seconds by automated bots. Fees, withdrawal delays, network congestion, slippage and limits on moving money in and out of exchanges often erase the apparent profit. A persistent price premium, such as the INR premium sometimes seen on Indian exchanges, often reflects real frictions like banking access and taxes rather than free money.