Bitcoin Price: Investors benefit from price arbitrage as cryptos become volatile

Mumbai: Cryptocurrency investors have started making profits through price arbitrage on Indian and overseas platforms as prices have become volatile in recent days.

Trading volume doubled on some exchanges as the prices of Bitcoin and other cryptocurrencies fluctuated. Bitcoin started trading on international exchanges at 6:30 p.m. on Wednesday at a price of $ 33,130, or £ 24.26. At the same time, prices quoted on Indian stock exchanges rose to £ 30.04.

Bitcoin fell to a three-month low on Monday amid speculation that Tesla might sell its holdings in the virtual currency.

While some exchanges fear the sudden surge in trading volume, others see it as a healthy market function.

“It’s good for pricing – the arbitrage opportunities arise from imbalances in the pricing mechanisms on two different equity platforms – the arbitrageurs move in and sell the higher price while buying the lower price until the gap or imbalance is balanced,” he said Ashish Mehta, co-founder of DigitX, a cryptocurrency platform. “It is a kind of automatic correction mechanism and very healthy to coordinate the prices on different participation platforms.”

In most cases, they suspect that investors are buying crypto assets on one platform and selling them on another, or indulging in similar maneuvers.

“The trading volume on our platform has increased as we have not had any major banking problems and deposits have not been affected. Many people do not hesitate and continue trading on our exchange. Since there is no prohibition for customers to stop trading, they like to pursue different trading strategies, which is completely legal, ”said Monark Modi, founder of Bitex, a cryptocurrency exchange.

For Indian traders, this could only be an opportunity as cryptocurrency movements are influenced not only by global headwinds but also by developments domestically.

“We have seen a 4-fold increase in trading volume compared to last month. Crypto investments are driven by the price movement of crypto assets rather than regulatory uncertainties, ”said Shivam Thakral, CEO of Cryptocurrency Exchange BuyUcoin.

Over the past few weeks, exchanges have created specialized wallets, integrated payment processing companies, deployed banks outside of India, and even set up “offline” payment systems that allow investors to access crypto assets.

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