[SPONSORED] 'We’ve developed a solution which allows us to perfectly hedge Bitcoin arbitrage ... offers our clients a 10% to 30% higher profit per trade cycle .' says Harry Scherzer, co-founder of FutureForex_ZA. Moneyweb CryptoCurrency
. It dropped out of favour in the last couple of years as crypto arbitrage providers shifted from Bitcoin to stablecoins, which are facsimiles of real currencies such as the US dollar, but using blockchain technology.Bitcoin, like US dollar-backed stablecoins, traditionally trades at a lower price in overseas markets, which can then be sold for 1% to 4% more in South Africa. Arbitrage has long presented opportunities for profit in countries with exchange control, like South Africa.
Assuming the maximum allowable foreign exchange allocation for arbitrage of R11 million, a net profit of 1.5% per trade is equivalent to R165 000 over the course of a year. For a married couple with R22 million available for arbitrage, that profit is potentially doubled. “We were doing it with stablecoins, now we’ve further enhanced our offering and can do it with BTC as well, which often has a slightly higher spread. There are times when USDC is better, so we can pick and choose. We did this because we want to maximise our clients’ returns. After fees, net BTC returns are typically about 0.3% to 0.4% better than stablecoins per trade. We are also fully hedged when trading BTC, so the profit is locked in from the moment we initiate the trade.
A realistic expectation is a net profit of 1% to 1.5% per trade, which can accumulate to over 100% per annum, depending on the number of trades performed over the year, he adds.
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