Arbitrage Bots — Great Levelers Of Cryptocurrency Prices

At first glance, the prices of major cryptocurrencies on different exchanges seem to move in perfect sync. However, this is just an appearance — in fact, HFT arbitrage algorithms do a tremendous job of constantly smoothing out the smallest price gaps.

Why Do Price Gaps Occur?

The main reason is the difference in liquidity and the composition of trading participants on different exchanges. Each exchange has its own stack of limit orders to buy and sell.

Different categories of players trade on different exchanges:

• Retail traders and investors
• Large professional traders and funds
• Algorithmic trading systems and bots
• Market makers — organizations that maintain liquidity

All of these participants have different objectives, capital, trading strategies and transaction volumes. Accordingly, their market buy/sell orders and limit orders have a significant impact on price movements.

For example, if a large hedge fund places a large market sell order, it can drive the price down sharply on a particular exchange. At the same time, if another large participant places a large number of limit orders to buy on another platform, the price there will tend to rise.

Because of this multidirectional action by different players, liquidity is unevenly distributed across exchanges, and price gaps occur for short periods of time. Where the price will go in the next seconds/minutes depends on the ratio of supply and demand in the exchange stacks on different trading floors.

It should also be noted that the largest exchanges have huge trading volumes. Even the smallest delays in the processing of bids and transactions affect the accuracy of pricing at any given moment.

Thus, due to the different composition of participants, peculiarities of their trading strategies, differences in liquidity and uneven distribution of supply/demand between exchanges for short periods of time, price imbalances and quote discrepancies for the same instruments are inevitable. These discrepancies are eliminated by arbitrage algorithms.

How Arbitrage Bots Work

High-frequency trading (HFT) arbitrage algorithms monitor all leading crypto exchanges around the clock and react instantly to the slightest difference in the value of the same asset.

As soon as there is a price difference, the bot immediately buys the asset on the exchange with the lower price and simultaneously sells it on the exchange with the higher price. This allows the arbitrage profit to be captured in a fraction of a second before the price difference disappears.

Ultra-fast Working Speed

Experts estimate that approximately 90% of all trades on major exchanges are executed by HFT algorithms. They operate at speeds hundreds of times faster than human capabilities, calculating and reacting to changes in fractions of a millisecond.

A human is simply physically incapable of competing with such speed and accuracy. The human arbitrage trader only has to watch price gaps disappear before he can react.

Invisible Heroes of Stability

It is HFT arbitrage bots that are the invisible heroes that provide the very visible stability and synchronized movement of cryptocurrencies on the world's exchanges. Thanks to their lightning-fast work, prices are literally equalized on the fly.

Antidote Concept

The Antidote concept is based on a system similar to high-frequency arbitrage trading. Our platform uses a unique algorithm based on artificial intelligence and machine learning. It also tracks price gaps and closes them with arbitrage trades.

In doing so, the Antidote system has a number of key advantages:

Our AI makes the algorithm even more efficient and allows for many more highly profitable trades.

You can see the algorithm from the inside and control the profit process.

Losses are minimized through diversification and built-in risk management.

No more competing with bots. Join Antidote and become a co-owner of an advanced new generation arbitrage algorithm. Take your investment to the next level!