Bitcoin Arbitrage Bot
Automating bitcoin arbitrage is one of the most sought after features for a bitcoin bot. Fortunately, a bitcoin arbitrage bot has been added to Haasbot, so we can see what this bitcoin arbitrage feature can do. This type of bitcoin arbitrage is an internal arbitrage bot, so it will not work with multiple exchanges. The reasoning behind this, as stated on Haasbot’s website, is that there are security risks involved with cross-exchange bitcoin arbitrage and they don’t want users to be at risk of the software possessing the ability to withdrawal bitcoins. I actually agree with this as a customer and I like that they put security to a high regard.
Evaluating the Bitcoin Arbitrage Bot
Since this is an internal bitcoin arbitrage bot, it works by monitoring the prices of specific cryptocurrencies within a single exchange for favorable price differences. Once the price differences are favorable and above our threshold, the bot will then execute trades along the chain of currencies to generate a profit. This is all evaluated by the user configured base currency (or the currency they want profits in). For example, say my base currency is BTC and I have the currencies USD/BTC, BTC/DOGE, USD/DOGE. The bitcoin arbitrage bot will execute trades when it is profitable to Sell BTC for USD, Buy DOGE with USD, and then Sell DOGE for BTC, which will end up with a small little profit. It is quite simple to set up and it basically works by just letting it run in the background.
Exchanges for the Bitcoin Arbitrage Bot
The bitcoin arbitrage bot is useful on exchanges with many different cryptocurrencies and even fiat. For instance, there is only one path for this on Bitfinex, so the choices for this are limited on bitfinex. But Cryptsy is a good place to run this bitcoin arbitrage bot, as it has fiat, multiple cryptocurrencies, but their API can be super slow at times.
Overall, this feature is quite nice. It is nice to be able to run it at the same time as my trade bots. The bitcoin arbitrage bot feature is very unique and there isn’t another bot out there that can do this. While you will not get rich over night doing this, small little profits overtime can add up. The bitcoin arbitrage bot is useful on exchanges with multiple currencies and fiat options.