Crypto arbitrage—commonly known as “brick moving”—is a strategy that allows traders to profit from price differences of the same digital asset across various cryptocurrency exchanges. While the crypto market operates 24/7, prices on different platforms don’t always move in sync due to varying liquidity, trading volumes, and user bases. This creates short-term price discrepancies, opening the door for arbitrage opportunities.
In this guide, we’ll explore what crypto arbitrage means, how to leverage time lags and price gaps between exchanges, and the top 5 risks involved in this trading method. Whether you're a beginner or an experienced trader, understanding these dynamics can help you make smarter decisions in the fast-moving world of digital assets.
👉 Discover how real-time market data can boost your arbitrage strategy
What Does “Brick Moving” Mean in Crypto?
In financial terms, arbitrage refers to buying an asset in one market and simultaneously selling it in another at a higher price, profiting from the price difference. In crypto, this is often called “brick moving” because traders metaphorically “carry” coins from one exchange to another—like moving bricks—to capture gains.
Imagine traveling abroad and buying luxury goods at a lower price overseas to resell back home. That’s essentially what arbitrage looks like—but with cryptocurrencies instead of handbags.
The reason crypto arbitrage is possible lies in the decentralized nature of exchanges. Each platform sets its own prices based on supply and demand within its ecosystem. As a result, temporary imbalances occur, especially during high volatility or when new tokens are listed.
While such opportunities were more common in earlier years—with spreads exceeding 10%—the maturing market has made consistent large-scale arbitrage harder to find. Today, success requires speed, precision, and constant monitoring of multiple platforms.
Do Time Lags Between Exchanges Create Real Arbitrage Opportunities?
Yes—despite the digital nature of crypto, price synchronization across exchanges isn’t instantaneous. Delays can range from seconds to even several hours, depending on trading volume, platform infrastructure, and regional user activity.
For example, during a sharp market drop on August 5th, Bitcoin briefly traded at 50,001 USDT on MAX Exchange, while Binance saw prices dip to 49,000 USDT. That 2% gap represented a clear arbitrage window—if executed quickly.
Similarly, a lesser-known altcoin might drop to $0.2756 on Binance by 2:15 PM, but still hover above $0.30 on MAX until 8:30 PM. A trader who buys low on Binance and sells high on MAX could lock in over 6% profit—provided they act before the markets align.
These inefficiencies are more pronounced on smaller exchanges with lower liquidity. Think of it like bottled water sold at a mountain peak: higher prices due to limited access and fewer sellers.
👉 Access real-time price tracking tools to spot cross-exchange gaps
3 Proven Crypto Arbitrage Strategies
Not all arbitrage methods are equal. Here are the three most effective approaches, ranked by simplicity and risk level:
1. Buy Low, Transfer, and Sell High
This is the most straightforward method:
- Purchase cryptocurrency on an exchange where the price is lower
- Transfer it to another exchange where the same coin trades at a premium
- Sell immediately for a profit
Pros: Requires only one initial capital pool
Cons:
- Network fees eat into profits
- Transfer times vary (especially during blockchain congestion)
- Risk of price reversal before the transaction confirms
This method works best for stablecoins or low-volatility assets with predictable transfer times.
2. Simultaneous Buy and Sell Across Two Exchanges
Instead of transferring funds, keep capital split across two platforms:
- When a price gap appears, buy on the cheaper exchange
- At the same time, sell pre-held coins on the more expensive one
This eliminates transfer delays and fees while locking in the spread instantly. However, it requires maintaining balances on multiple exchanges, reducing overall capital efficiency.
You’ll also need to pre-position assets based on which coins are likely to experience volatility—adding a layer of strategic planning.
3. Spot Purchase + Futures Short Position
For advanced traders seeking maximum capital efficiency:
- Buy the asset on Exchange A (lower price)
- Open a short position on Exchange B (higher price) using perpetual futures contracts
- Later, transfer and sell the physical coin on Exchange B while closing the short
This strategy hedges against market moves during transit. Even if prices crash en route, your long and short positions offset each other, preserving the initial spread as profit.
⚠️ Note: This method isn’t available on all platforms—especially in regions like Taiwan where short selling may be restricted. Always check local regulations and contract terms.
When Are the Best Times for Crypto Arbitrage?
Opportunities peak under two main conditions: new token listings and high market volatility.
New Token Listings Create Temporary Gaps
Exchanges don’t list new coins simultaneously. If Exchange A launches a token early while Exchange B delays listing, demand can spike on B when it finally opens—creating massive spreads.
For instance, when Bitget began trading MAX token, early holders who transferred from MAX Exchange saw prices jump nearly 9x within minutes—a rare but real arbitrage windfall.
Staying informed about upcoming listings through official announcements and community channels gives you a crucial edge.
Market Volatility Amplifies Price Divergence
During sharp price swings (+/- 10% or more), smaller exchanges often lag behind major players like Binance or OKX due to thinner order books.
During such events:
- Large sell-offs may crash prices on illiquid platforms
- Buyers on bigger exchanges absorb volume faster, keeping prices relatively stable
- The gap becomes an arbitrage zone—for those fast enough to act
Monitoring real-time alerts and setting up price trackers can help you catch these fleeting moments.
Key Risks of Crypto Arbitrage You Can’t Ignore
Arbitrage may seem risk-free, but several pitfalls can turn profits into losses:
Transaction Fees and Time Costs Add Up
Trading and withdrawal fees typically total around 0.3%. That means any spread under this threshold results in net loss. Factor in your time spent monitoring markets—this effort has value too.
Withdrawal Delays Can Kill Profits
Blockchain congestion or exchange review processes can delay deposits by hours. By then, the favorable price may have vanished.
👉 Use platforms with fast settlement to minimize transfer risk
Price Gaps Can Close Before Execution
Markets correct quickly. If you buy before confirming a sale elsewhere, the gap may disappear—leaving you holding an asset at break-even or worse.
Slippage and Low Liquidity
Just because a coin shows a high bid price doesn’t mean there’s enough volume to fill your entire order. You might only sell part of your holdings at the desired rate, forcing you to lower your price for the rest.
Tax Implications
Using fiat currencies (like TWD or USD) in arbitrage loops may attract regulatory scrutiny. Some tax authorities treat frequent conversions as business income rather than capital gains—potentially increasing liabilities. Stick to crypto-to-crypto trades to simplify reporting.
Daily Withdrawal Limits
Large-scale arbitrageurs must consider exchange-imposed withdrawal caps. Even with KYC verification, limits exist—and exceeding them halts operations entirely.
Confusing Similar-Ticker Tokens
Coins like “MAX” exist on multiple chains and platforms—but aren’t interchangeable. Sending MAX from one ecosystem to another could result in permanent loss if they’re not the same token standard. Always verify contract addresses before transferring.
Frequently Asked Questions (FAQs)
Is crypto arbitrage legal?
Yes—arbitrage is a legitimate trading strategy recognized globally. However, ensure compliance with local regulations regarding taxation and cross-border transfers.
Can beginners do arbitrage safely?
Yes, but start small. Use method #1 with stablecoins and well-known exchanges to minimize risks while learning the process.
Do I need bots for successful arbitrage?
Not necessarily—but automation helps. Manual tracking works for occasional opportunities; bots excel in high-frequency scenarios where milliseconds matter.
Why don’t more people do arbitrage if it’s profitable?
Because opportunities are fleeting and require technical setup, fast execution, and risk management. Competition from automated systems also reduces available margins over time.
Are stablecoins better for arbitrage?
Often yes—due to lower volatility and faster settlement times. However, spreads tend to be smaller compared to altcoins during major events.
Can I lose money doing arbitrage?
Absolutely—if you ignore fees, transfer times, slippage, or market shifts. Never assume risk-free returns without calculating all variables first.
Final Thoughts: Smart Arbitrage Starts with Preparation
Crypto arbitrage remains a viable way to generate returns without predicting market direction—by simply exploiting inefficiencies between exchanges. While pure “risk-free” arbitrage is rare today, strategic traders can still profit by combining speed, technology, and disciplined risk control.
To succeed:
- Monitor new listings and volatile markets closely
- Pre-fund accounts on multiple exchanges
- Use hedging techniques like futures to protect profits
- Always calculate net gains after fees and delays
Stay alert, stay informed—and let market inefficiencies work in your favor.