Cryptocurrency markets and trading platforms create interesting opportunities for arbitrage, where traders can profit from price differences between exchanges, fiat currencies, crypto-currencies or even all 3 combined in some models. However, there are several challenges that prevent these opportunities from being fully exploited. Factors like platform fees, Network fees, network delays in confirmation time, liquidity issues, and even differences in regulations across countries can make it difficult to execute profitable trades. This thesis explores how these barriers impact the effectiveness of arbitrage strategies, focusing on the development in current crypto-crypto exchanges like coinbase, Binance and Kraken amongst others that have created a hub for the potential exploitation of the arbitrage phenomenon within their own platform. Using real and live data from major exchanges and fiat exchange rates, This paper analyzes how these opportunities have changed over time and whether they are still profitable. The research finds that, while arbitrage still exists in the realm of possibilities, it has become harder to take advantage of as the market matures and liquidity improves. Additionally, slow blockchain confirmations and platform-specific limitations continue to make some trades unfeasible when it comes to arbitrage alone. This thesis aims to provide a clearer understanding of how arbitrage functions in the cryptocurrency space today, Offering insight on how a certain trading strategy has the potential to create arbitrage return assuming all the components are right for what an individual can control for.
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