Crypto arbitrage bot

What does an arbitrage bot actually trade?

It buys one executable price and sells a related executable price. Common structures include:

Type	Example	Hidden constraint
Cross-exchange	Buy BTC on A, sell on B	Inventory and withdrawals
Triangular	USDT → BTC → ETH → USDT	Three fees and book depth
Spot-futures basis	Buy spot, short future	Basis convergence and margin
Funding capture	Long one contract, short another	Funding can change before payment

Our coin pages publish eligible venue prints and qualifying volume. They show where to investigate, not a guaranteed tradable profit.

Why is last-price arbitrage misleading?

If venue A last traded at $99 and venue B at $101, the headline gap is 2.02%. But A may currently ask $100.20 while B bids $100.60. Executable gross spread is only 0.40%. Available size may be $80 before prices move.

Subtract entry fees on both venues, slippage and eventual rebalancing. At 0.10% per leg, half the executable gap is gone before moving inventory.

Why pre-fund both exchanges?

Transferring after a signal is usually too slow. Professionals hold quote currency on the buying venue and the asset on the selling venue, execute both legs together, then rebalance later. This reduces transfer latency but adds custody exposure and capital fragmentation.

Withdrawals can pause, networks can congest and regional accounts can have different limits. A profitable fill is incomplete until inventory can be restored.

What is leg risk?

One order fills while the hedge does not. The bot is now directionally exposed. Controls include simultaneous immediate-or-cancel orders, maximum slippage, minimum depth, timeouts and automatic hedge logic. None guarantees a fill during a fast book change.

A signal without executable size on both sides is a quote, not an arbitrage.

How should a candidate be filtered?

Require fresh timestamps, at least two independent venues, minimum volume, sufficient top-of-book depth and a net spread above a conservative cost buffer. Reject prices from tiny markets. This is why CryptoTrades displays eligible venue count and combined qualifying volume beside spreads.

Can funding-rate arbitrage be neutral?

Long spot and short a perpetual can reduce directional exposure while collecting positive funding from the short. It still faces basis changes, funding reversal, borrow or spot financing, exchange default and short-leg liquidation. Read the funding guide and monitor live funding comparisons.

Minimum bot controls

Use read-only keys during development, disable withdrawals, whitelist IPs, cap order notional, log each decision and include a kill switch. Backtest with bid/ask data rather than candles. Paper results based on last prices are not execution evidence.