The main question answered first
Yes, people earn from this. No, it is not a money button. A real route returns 1–3% per operation, the operation takes fifteen minutes to an hour, and making it work needs money on two venues and attention to detail.
For a sense of scale: with 1000 dollars a 2% route gives 20 dollars. Three or four routes a day is 60–80. With 10 000 the same percentages become 600–800. Arbitrage scales with capital, not with effort — the percentage is the same and the time per trade is the same.
And the other side, honestly: your capital is locked for the duration, some routes vanish while you open them, and a mistake in the transfer network costs the whole amount.
The idea in one sentence
Arbitrage is buying where it is cheaper and selling where it is dearer, for the difference. The idea is ancient — money changers at medieval fairs did the same. Crypto only changed the speed, and the fact that there are now hundreds of fairs open around the clock.
The key difference from ordinary trading: you do not care where the market goes. Both trades happen almost simultaneously, and the earnings come from the price gap rather than from movement.
Why prices differ at all
Every exchange has its own isolated order book. Nothing forces two of them to show the same number — they are linked only by traders noticing a gap and closing it.
- Different liquidity. Big venues have dense books, small ones are thin and a single trade moves the price.
- Local demand. Especially visible on P2P: where currency is scarce, people pay a premium for a dollar in USDT.
- Reaction speed. After sharp news, exchanges do not update at the same moment.
- Transfer barriers. If a coin is slow or expensive to move, closing the gap is unprofitable — so it lasts.
That last point matters most: a gap survives exactly where it is hard to close. That is why P2P and DEX-to-exchange spreads are wider than between two major venues where bots work.
Types of arbitrage and which to pick
P2P arbitrage — where people start
Buy USDT from people for ordinary money on one exchange, sell it higher on another. Entry from 300 dollars, and no wallet or blockchain knowledge needed.
In detail: the step-by-step guide.
Cross-exchange spot — the classic
A coin is cheaper on one venue, dearer on another. The catch: prices move while the transfer is in flight. Solved by keeping balances on both exchanges in advance.
In detail: cross-exchange spot arbitrage.
Funding — for people who do not want to guess the market
You open opposite positions on spot and futures, the coin price stops mattering, and the funding rate accrues.
In detail: funding arbitrage.
Triangular — inside one exchange
Three trades in a loop: USDT → BTC → ETH → USDT. No transfers at all. But three trades at 0.1% cost 0.3%, so working loops exist almost only where the maker fee is zero.
In detail: triangular arbitrage.
DEX → CEX — the widest spreads and the highest requirements
Gaps last for hours, but you need a wallet, gas and the ability to check a token contract.
In detail: the DEX to CEX guide.
What eats the profit
- The buying fee — usually 0.1%.
- The selling fee — the same again.
- The transfer fee — network-dependent, from 0.001 USDT to several dollars.
- Slippage — if your order is larger than the best offers in the book.
- Price movement during the transfer.
The practical conclusion: a route under 0.5% is almost always a loss, and anything showing 20–40% means a suspended withdrawal or a dead pair.
The rule for beginners
A percentage without size means nothing. Six percent on an offer with 60 USDT available is under four dollars. One and a half percent on three thousand is forty-five. The second is ten times better despite the smaller percentage.
Where to start concretely
- Open accounts on two exchanges and complete verification — it takes longer than you expect.
- Start with P2P: the clearest and widest spreads are there.
- Do your first trade on a minimal amount. The goal is to walk the whole path, not to earn.
- Write down the result. After ten trades you will see your real return instead of the expected one.
- Only then scale up and add cross-exchange spot and funding.
Frequently asked
How much money do I need? A sensible minimum is 300–500 dollars. Below that, transfer fees take too large a share.
Can this replace a job? Income depends on capital, not hours. A thousand dollars will not produce a salary however long you sit.
Do I need bots? Not to start. Walk the path by hand first, or you will not understand what you are automating.
Is it legal? Buying and selling crypto is legal in most countries. Taxes depend on your jurisdiction.
Which type is most profitable? The one you have mastered. DEX to CEX has the widest spreads and the highest cost of error.