When done successfully, cryptocurrency arbitrage can literally mean making money out of thin air. But done wrong, it can mean losing huge sums, so make sure you know what you’re doing before you dive straight in.
This type of arbitrage involves a long/short trade. Here the arbitrageur buys underpriced crypto (“long”) and simultaneously sells overpriced crypto (“short”).
If you’re opting for the even more complicated triangular arbitrage, you’ll basically just need to do a more complex version of the above methods by transferring between three different cryptocurrencies instead of just two.