Research Reveals Huge Risk-Free Earnings Concealed by the Bitcoin Markets

Research Reveals Huge Risk-Free Earnings Concealed by the Bitcoin Markets

Millions and millions of dollars per year can be concealed in risk-free earnings on the Bitcoin markets, experts say.

The Bitcoin market has expanded exponentially in the decade or thereabouts as it invented the crypto-currency. And while that development has not come in conjunction with market efficiency which, based on the latest studies recently released in the Financial Analysts Journal (FAJ), the value of one bitcoin on any cryptocurrency exchange is worth approx equivalent.

The study shows that crypto exchanges regularly experience large price disparities for Bitcoin. Such price disparities will enable traders to purchase bitcoin on an exchange in which it’s valued lower and then exchange at the same time where it’s priced up. This often implies traders can get immediate, risk-free earnings. This trading strategy, referred to as arbitrage, is popular in established markets and has become a practice that banks and other financial institutions typically participate in.

Bitcoin Earnings in Millions Made Available
The overall potential earnings from bitcoin arbitrage in 2017 equaled at least $377 million, as per statistics outlined in the FAJ paper entitled “Decentralized Efficiency? Arbitration by Sinan Krückeberg and Peter Scholz in Bitcoin Markets. The researchers’ further state there was a total of $384 million in minimum arbitration rights readily accessible in the first quarter of 2018.

All that is interesting as to the results is that while markets increase in size these disparities in inter-market trading typically diminish rapidly as qualified arbitrage traders access the markets. However, in the Bitcoin market, the reverse happened.

The market has risen from virtually zero to $0.8 trillion in the decade or thereabouts since it was created, the researchers claim. However, the prospects for arbitration seem to have increased in scope and instead of diminishing while most market analysts may have predicted.

Study results reveal that the arbitrage prospects equaled a scant $1.1 million in 2016. However a year on, this had exploded further about 300-fold and then increased in the first three months of 2018 roughly about four-fold on an annual growth rate.

If market prospects like these emerge, you may anticipate companies to show interest and start opening innovative crypto-arbitrage activities to harvest their share of the earnings. Rather put in another way, stay prepared to enter the market with the big players.

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