Bitcoin’s price may be down for the time being, but bitcoin arbitragers aren’t complaining; they are raking it in using arbitrage – buying it at a low price and selling it to exchanges where the price is higher.
Arbitrage opportunities are hard to find in regulated securities markets, but bitcoin trades on more than 100 exchanges. Hundreds of other cryptocurrencies trade on exchanges as well.
Arbitrager Rakes It In
Virgil Capital, a cryptocurrency arbitrage fund founded in 2016 by 21-year-old Stefan Qin, returned 500% last year after fees and is now managing $23.5 million, The Wall Street Journal reports.
Qin, An Australian living in California who put his studies on hold at Minerva Schools, uses an algorithm called Tenjin that monitors prices on about 40 exchanges The algorithm allows him to identify arbitrage opportunities.
While bitcoin fell 28%% in early January, Virgil Capital was up by 12% after fees, Qin said. Qin thinks he will continue to be profitable even if bitcoin continues to lose value. He said the market is “incredibly irrational” at the present time, and is poised for a correction.
Qin, a former math whiz, plans to finish his college degree at some point, but has no immediate plans to do so.