Arbitrageur

An arbitrageur in the context of cryptocurrency is an individual or entity that exploits price discrepancies of the same asset across different markets to make a profit. Arbitrageurs buy the asset at a lower price in one market and simultaneously sell it at a higher price in another market, capitalizing on the price difference. This process helps to equalize prices across markets.

Example:

Let's say Bitcoin is trading at $10,000 on Exchange A and $10,200 on Exchange B. An arbitrageur would buy Bitcoin on Exchange A for $10,000 and sell it on Exchange B for $10,200, making a profit of $200 per Bitcoin minus any transaction fees.

Case:

In 2017, there were significant price differences for Bitcoin across various cryptocurrency exchanges due to inefficiencies, differences in trading volumes, and regional regulatory factors. This situation created ample opportunities for arbitrageurs to exploit the price gaps and generate profits. Many traders used automated trading bots to execute trades swiftly and take advantage of these arbitrage opportunities.