# What Is Crypto Arbitrage? Types, Examples and Real Costs

> Crypto arbitrage profits from price or funding rate gaps for one asset across venues. Learn the main types, worked examples and the costs behind net profit.

Updated: 2026-09-23

**Crypto arbitrage is a trading strategy that profits from differences in the price, or the funding rate, of the same asset on different markets, while keeping exposure to the asset's price close to zero.** The classic form is simple: buy where it is cheaper, sell where it is more expensive. In practice, the profit is whatever is left after fees, slippage and transfer costs.

## Key takeaways

- Arbitrage exploits **price or rate gaps** for the same asset across venues.
- Main types: **cross-exchange (spatial), funding rate, CEX-DEX, DEX-DEX and triangular**.
- **Net profit** is what matters: gross spread minus fees, slippage, gas, withdrawal and bridge costs.
- Big gaps on major coins close in **seconds**; persistent opportunities are usually in funding rates and less liquid markets.
- Arbitrage is **low-risk, not risk-free**.

## Types of crypto arbitrage

| Type | How it works | Main costs and risks |
|---|---|---|
| Cross-exchange (spatial) | Buy on exchange A, sell on exchange B | Trading fees, withdrawal fees, transfer time |
| Funding rate arbitrage | Short the perp with high funding, long the perp or spot with low funding | Fees, basis changes, liquidation of one leg |
| CEX-DEX | Trade the gap between a centralized and a decentralized exchange | Gas, DEX price impact, deposit/withdrawal delays |
| DEX-DEX | Trade the gap between two DEX pools, possibly on different chains | Gas, price impact, bridge fees and bridge risk |
| Triangular | Cycle through three pairs on one exchange (e.g. USDT → BTC → ETH → USDT) | Fees on three trades, speed |

## Worked example: cross-exchange arbitrage

A [token](/learn/what-is-a-token) trades at **$100.00** on Exchange A and **$100.60** on Exchange B. You trade **$10,000**.

| Item | Amount |
|---|---|
| Gross spread (0.60%) | +$60.00 |
| Taker fee on buy (0.10%) | −$10.00 |
| Taker fee on sell (0.10%) | −$10.06 |
| Withdrawal fee | −$2.00 |
| Slippage (0.10% total) | −$10.00 |
| **Net profit** | **≈ +$27.94** |

The gross spread was 0.60%, but the net return is closer to **0.28%**, and the price can move while funds are in transit. Pre-funding both exchanges avoids the transfer delay but ties up more capital.

## Worked example: funding rate arbitrage

BTC [funding](/learn/what-is-funding-rate) is **0.03% per 8h** on Exchange A and **0.00%** on Exchange B. You short **$10,000** of BTC perps on A and go long **$10,000** on B, then hold for **7 days**.

| Item | Amount |
|---|---|
| Funding received on A (0.03% × 21 payments) | +$63.00 |
| Funding paid on B (0.00%) | $0.00 |
| Taker fees, 4 fills × $10,000 × 0.05% | −$20.00 |
| **Net profit before slippage** | **≈ +$43.00** |

That is about **0.22% per week on $20,000 of total margin**, roughly **11% APR**, with no directional BTC exposure. The risks are that funding rates converge or flip, the price basis between the two perps changes, and a sharp move liquidates one leg if it is under-collateralized. See [liquidation](/learn/what-is-liquidation).

## The costs that decide net profit

1. **Trading fees**: maker vs taker rates on every fill.
2. **Slippage and price impact**: large orders move thin order books and DEX pools.
3. **Withdrawal and deposit fees**, plus minimum withdrawal sizes.
4. **Gas fees** on DEX trades, which vary with network congestion.
5. **Bridge fees and bridge risk** for cross-chain trades.
6. **Transfer time**: prices can move while funds are in transit.
7. **Wallet status**: exchanges sometimes suspend deposits or withdrawals for a token, which makes an opportunity impossible to execute.
8. **Counterparty risk**: funds held on an exchange are exposed to that exchange.

## Why arbitrage opportunities exist

- **Fragmented liquidity** across hundreds of CEXs, DEXs and chains.
- **Different traders** on different venues, for example retail-heavy exchanges vs professional ones.
- **Different funding formulas and intervals** between exchanges.
- **Friction**: slow withdrawals, suspended wallets and bridge delays keep prices from converging.
- **Same-ticker confusion**: two unrelated tokens can share a ticker, so real spreads must be verified by contract address.

## How ArbTide helps

ArbTide collects prices and funding rates from every tracked CEX and perp DEX server-side, and shows the best spot and perpetual route for every coin with the net spread after taker fees and the size available at the top of the book. See the [live arbitrage scanner](/arbitrage), a single coin like [BTC](/arbitrage/btc), the [cash and carry scanner](/carry), every [arbitrage strategy](/strategies) or [live funding rates](/funding-rates).

## Frequently asked questions

### What is crypto arbitrage?

Crypto arbitrage is buying and selling the same asset, or opening offsetting positions, on different venues to profit from a price or funding rate difference, while keeping exposure to the asset's price close to zero.

### Is crypto arbitrage risk-free?

No. Execution risk, slippage, fees, transfer delays, withdrawal suspensions, exchange counterparty risk and liquidation of one leg can all turn an apparent profit into a loss.

### What is funding rate arbitrage?

Funding rate arbitrage is a delta-neutral strategy that shorts a perpetual contract on the venue with the higher funding rate and goes long on a venue with a lower rate. Price moves offset each other, and the trader earns the funding difference.

### Is crypto arbitrage still profitable?

Large, obvious price gaps on major coins close within seconds. Opportunities persist in funding rate differences, newer listings, less liquid tokens and cross-chain DEX markets, but net profit depends heavily on fees, slippage and capital efficiency.

### What is CEX-DEX arbitrage?

CEX-DEX arbitrage exploits price differences between a centralized exchange such as Binance and a decentralized exchange such as Uniswap or Jupiter. It must account for gas fees, DEX price impact and the time needed to move funds.