Arbitrage in arbitrage is called arbitrage in English. It means that investors simultaneously take advantage of the price difference between the interest rates or currency exchange rates of two parties. One party buys when the price is lower, and at the same time sells the other party at a higher price, buying low and selling high, thereby obtaining low-risk returns.

As for moving bricks, it is commonly known as the cryptocurrency arbitrage model. It can be understood from the literal meaning. Cryptocurrencies such as Bitcoin are compared to bricks. After buying cheaper bricks in place A, the bricks are moved to place B at a high price. Sell ​​and earn the price difference, which is called arbitrage. Let’s watch the video to get a quick understanding!

The most important conditions that must be met to achieve the conditions for arbitrage are:

The same asset has different prices in different markets

If we look at the cryptocurrency market, place A is a certain exchange and place B is another exchange. When the price of one bitcoin on exchange A is $6,000, the price of one bitcoin on exchange B is $6,500. When , the conditions for arbitrage are reached.

There are currently two simple operations: we will take Bitcoin (BTC) as an example:

Moving brick arbitrage: "directly moving bricks"

After purchasing 1 BTC at exchange A for US$6,000, transfer it to exchange B. Once exchange B receives the BTC, it immediately sells the BTC at a price of US$6,500 per BTC, thus making a profit of 500 from the price difference. Dollar. But the actual profit earned may be less than $500, because transactions require handling fees, which are paid to the exchange platform, mostly 0.1%~0.25%. In addition, you also need to pay a handling fee to withdraw coins from exchange A to exchange B. This handling fee depends on how much the platform charges.

Brick-moving arbitrage: "Hedge move-brick"

To hedge, you need to have USD and BTC on exchanges A and B respectively. Once a price difference occurs, you can operate immediately. One BTC on exchange A costs US$6,000, and one BTC on exchange B costs US$6,500. You will buy one BTC on exchange A and sell one BTC on exchange B at the same time, earning US$500 immediately. On the contrary, if the price of 1 BTC on exchange A is 6,500 US dollars and the price of 1 BTC on exchange B is 6,000 US dollars, you can also immediately buy BTC on exchange B and "at the same time" sell BTC directly on exchange A to complete the move. .

但是，一定很多人有疑问，第一种和第二种不是差不多，但是其实加密货币市场最令人著迷的就是市场波动性大，可能刚刚才上涨 10%，不到 3 分钟就已经赔光或者跌 20% 后，突然就来了一根大绿棒，瞬间暴涨 50% 以上都有可能，再加上比特币转币需要时间入帐（快则 30 分钟，慢则 1 小时甚至更久），所以可能刚在 A 交易所买完 1 BTC 6000 美元后转币至 B 交易所的期间，市场大跌，当 BTC 入帐时，B 交易所 BTC 价格已经跌至 5500 美元，这样就亏损了 500 美元，也是所谓的「搬砖砸脚」。

Therefore, using the second hedging method of moving bricks can avoid the risk of market fluctuations and save the maximum time cost, because the biggest purpose of moving bricks is to earn rewards with the lowest risk operation. However, although hedging can avoid the risk of current market fluctuations, it does require hoarding some cryptocurrency as inventory, which will still be affected by market fluctuations.

Therefore, the first type of direct trading is more suitable for those who have no cryptocurrency inventory on hand and only earn the price difference. The second type of hedging is suitable for those who have sufficient faith in cryptocurrency and hold cryptocurrency for a long time. , just use the inventory on hand for hedging, but compared with the first method, you need to prepare 2 times the capital level, because both exchanges must place assets, one side is cryptocurrency, and the other side is USDT or legal currency, in order to Carry out one buying and one selling action at the same time.

Things you need to pay attention to when moving bricks and arbitrage

  1. Is the trading volume of the exchange sufficient? Although some exchanges A and B have large price differences, the trading volume is pitifully small. There may be insufficient buy and sell orders (no one buys or no one sells), resulting in the inability to complete transactions immediately.

  2. The daily currency withdrawal limit of exchanges. Some exchanges have limits on the daily currency withdrawal limit. You must pay attention to the fact that each exchange has different currency withdrawal limits. Don't find yourself unable to withdraw currency after buying and preparing to move. This will be embarrassing.

  3. Exchange entry and exit times: Some transactions require manual review before they can be transferred out, so there is a risk that the transfer time will be too long and the time cost will increase.

  4. Don’t look for exchanges with unknown origins. If the exchange suddenly closes down or freezes your account one day, you will have no way to seek help.

Nowadays, the opportunities for arbitrage are not as good as before. There are many arbitrage software operating on major exchanges, which are also commonly known as "brick robots". Manual operation speed is unlikely to beat the robot. Once an order appears, the robot will definitely kill it instantly, and there is a certain risk of error in manual operation. Therefore, it is now necessary to find that the price difference between two exchanges is almost negligible. Even if there is, it will be quickly eliminated by the brick-moving robot. It is recommended that you operate when the price difference is large, so as not to cause mistakes.