What are the risks associated with crypto arbitrage trading?
The counterparty risk we face primarily lies in trusting that we have chosen the best service providers across the entire ecosystem. We have mitigated this risk by having an FX intermediary within our organization and holding the FSCA Cat II discretionary asset management license (FSP 50850). This allows us to book and hedge the forex rate while negotiating the best premium rate. The unique advantage of having these licenses in-house is that we can assess the potential profits before committing to the trade, resulting in zero losses since 2017. This approach is pure arbitrage.
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What is cryptocurrency arbitrage?
Arbitrage is a process that involves buying and selling securities, currency, or commodities in different markets simultaneously to profit from differences in prices for the same asset. These price differences occur due to changes in supply and ...
Why does the OTC premium appear to be lower than the on-exchange premium?
The premium advertised by many other arbitrage services is based on-exchange prices and is misleading. That figure is calculated by taking the best possible prices on exchange at any given time and is often unattainable without taking on additional ...
Which cryptos or financial instruments are traded?
We have the flexibility to utilise stablecoins and cryptocurrencies based on the premium they offer when we make trading decisions. In the past, we have typically preferred stablecoins due to their higher liquidity and lower risk. However, there are ...
What is required in order to do the crypto arbitrage?
To do the crypto arbitrage, You will need to: Have a South African ID card or book Have a South African tax number Be tax compliant in South Africa Have a minimum of R250,000 for your trading capital. These funds must be your own and cannot be loaned ...
Is cryptocurrency arbitrage legal?
Yes. South African Reserve Bank (SARB) have acknowledged and approved our process. This along with our legal opinion on the Currency and Exchanges Act, and with the support of our counterparties such as Capitec, means we are able to engage in legal ...