fbpx
All Posts By

Coinscious Team

Cryptocurrency Trading Tools

World Tour Recap: Where We’ve Been And Where We’re Going

By | Events | No Comments

This summer has been a whirlwind tour for the Coinscous team. Our goal has been to raise awareness of our platform and share our vision for tools that can make navigating the coin market better and easier.

Amsterdam

Our team kicked off the summer tour in Amsterdam at the Blockchain Expo. The conference focused on ICOs and cryptofinance, as well as how blockchain will affect the insurance and banking industries, and open up doors for new types of payment options.

Read more


Atlantic City

Our CTO, Daniel Im, next arrived in Atlantic City, NJ for the Blockchain World Conference. For many nations and their governments, how to regulate blockchain/crypto projects is a big concern. This was discussed at the conference. Daniel also got to meet Amir Dossal, who won the Blockchain Humanitarian award, designed to honor leaders who use blockchain technology to solve real-world problems.

Read more


Montreal

The team next attended the annual Startupfest in Montreal. As the name suggests, this is a gathering of all things startup-related. New businesses connect and meet with interested investors. It’s also a chance to learn how other startups, farther along in their business journey, have navigated through the process of starting and funding their businesses.

Read more


San Francisco

San Francisco hosted this year’s Distributed 2018, where Coinscious was a sponsor. The conference focused on the power of decentralized business. Another goal for this conference is to help bridge the gap that exists between Eastern and Western blockchain initiatives.

Read more

Krakow

Our team hosted an event for local blockchain and cryptocurrency enthusiasts. Our COO, Binh Ho, offered his insights on how AI and data-driven insights will make positive changes within the coin market.

Read more


New York City

In the middle of our tour, the Coinscious logo made an appearance in Times Square on the NASDAQ big screen. The timing of our logo landing in “the crossroads of the world” could not have been better as we criss-crossed the globe spreading our message.

Read more


Shanghai

After initial stops in Canada, US, and Europe, our team headed to Asia. Our first stop was in Shanghai. This was at the China Wealth Management Ecology Conference where Coinscious won the “Fintech Innovation Award.”

Read more


Hong Kong

From Shanghai, our next stop was the Finwise Summit in Hong Kong, one of the most influential blockchain summits around. There our CEO Tom Bao delivered a keynote that described the Coinscious Collective™ platform and displayed our recent Coinscious Lab experiment.

Read more


Beijing

In Beijing, there were several investors and participants in the blockchain community that were in attendance, including OK Capital, AKHacks, Tfund, ValueNet Capital, FBG Capital, WBO, GVC, BQEX, BlockOriginCapital, ValueNet Capital, MPT, AFund, OnFund and many others.

Read more

Hangzhou  & Wenzhou

Our next stop was in Hangzhou. Our team noted all the different types of players within the coin trading market, and how the Coinscious platform can tackle the biggest concern of each group. This event was a symposium on technology and industry integration of blockchain technology. Janson and David gave presentations to the attendees, each describing how Coinscious delivers AI-driven analysis so investors can make smarter trading decisions.

Wenzhou was the final stop on our tour of Asia, where our team met with a group of leaders in the industry. Janson spoke at this event, as well, describing the current state of the cryptocurrency market and pain points experienced by investors. He described the challenges of security, multi-exchange accounts, and multi-wallet management. He noted how these and other challenges erect barriers that prevent interested investors from entering the market. After describing the Coinscious platform, attendees were eager to learn more and expressed excitement about the upcoming launch.   

Read more

Where We’re Going Next

At every opportunity, our team has described the problems plaguing the cryptocurrency market and how Coinscious has focused on overcoming them. As we describe what our platform can do, we’re greeted with excitement from listeners and potential investors. We’ve attracted attention from professional investors, finance managers, and media at every stop of our tour.

So what’s next for us? As we head back to our home country of Canada, we’re taking all of this energy and excitement and using it for inspiration. As we look ahead to our launch, we are applying this passion to our work to make the Coinscious Collective™ platform even better. We are more focused than ever on creating a platform that resolves some of the biggest issues investors face in the cryptocurrency trading market.

Keep following our team. As we prepare for launch, some of the most exciting milestones are ahead of us. Stay tuned as we move forward on our journey to help the cryptocurrency market shift from an unpredictable free-for-all, to a mature environment where investors of all kinds—from professionals to amateurs—can reap the rewards gained through smart, well-informed investment strategies.  

 

The Coinscious Global Tour Comes to a Close

By | Events | No Comments

The Coinscious team landed in Hangzhou where we made an appearance and spoke at the Consensus Ark symposium. This event was attended by Janson Jiang, our Co-Founder and CSO; David Buell, our Director of Marketing; along with members of our Shanghai team. This significant event was sponsored by CA Consensus College, One TV, and BC Incubation Commune.

Janson took to the stage and described the three core technologies of the Coinscious Collective™ platform: Big Data, Artificial Intelligence and Blockchain. He emphasized how the Coinscious Collective™ platform is designed for both professional traders, as well as your non-technical average joes. Janson stressed the importance of having good insights in order to successfully trade in the coin market, but noted that there is currently a lack of good data providers. He advised that in order to address this concern, Coinscious has deployed hundreds of global servers to collect data from major exchanges and blockchains. He also announced that Coinscious has set up a laboratory with a team of top AI experts to analyze the rules of cryptocurrency. In a couple months, this data will be available to our institutional users.

In his presentation, David discussed the current status of the coin market. He explained how the bearish coin market is just a part of the volatility of an immature market. Even so, there is a lot of optimism for the coin market. Even with lower coin prices, more funds continue to move into the space and we also see that user adoption is growing year-after-year. Globally, the coin market is still in its infancy and its continued adoption by the general public will help allow it to further mature.  

On to Wenzhou

The last and final destination on our Coinscious global tour was Wenzhou! We had the great opportunity of attending an intimate and private event with 30 distinguished guests. During this event, our team introduced our Coinscious Collective™ platform and shared insights into cryptocurrency investment trends, tools, and strategies.

Janson had the honour of being a keynote speaker here, as well. During his speech, he shared his views on the current global coin market and the pain points it is experiencing. He noted that the coin market is currently in a rapid-growth stage. Inevitably, risk comes with opportunity. The main challenges for the coin market include: unpredictability of news reports, lack of useful information, security issues, multiple exchange accounts, and multi-wallet management difficulties. Janson explained that ultimately, there is a lack of big data and analysis tools that can deliver professional quantitative analysis. Together, all of these challenges erect barriers that prevent potential investors from entering the market.

Furthermore, Janson described how AI-driven insights can make up for these shortcomings. He carefully illustrated how an automatic arbitrage trading scenario was able to take advantage of the value found within the Coinscious Collective™ platform. He shared the platform’s 24/7 event monitoring capability, pattern recognition and event analysis features, as well as ratings based on user risk preferences and ROI expectations.

Just as in Hangzhou, the responses we received were overwhelming and humbling. Both individual and institutional investors showed great interest in Coinscious and its data services. Many expressed their eagerness for our platform to launch so that they can start accessing investment tools that will provide helpful market forecast and trading strategies.

At this event, Janson and Tom participated in a Q&A session. Below are some highlights from that interview.

Q1: How can Coinscious beat competition that offers similar tools and services?

A1: There are very few, and in fact no major players, offering data services in the cryptocurrency market. If you take the stock market as a benchmark, many companies provide data services in every country’s market. In terms of numbers, there is nothing comparable in the cryptocurrency market. In addition, our AI-driven analysis methods differ greatly from the traditional algorithm and speed driven financial markets, like the stock and foreign exchange markets. Given the unique traits of the cryptocurrency market, we believe that the Coinscious platform could help quantitative trading investors perform better.

Q2: In the traditional markets, the quantitative operation needs to be back tested, using data from five or even ten years ago. A data set that large is not available in the cryptocurrency market. Given the lack of data, how can Coinscious overcome the difficulties of quantitative trading?

A2: This is exactly the type of challenge that Coinscious was created to address. Coinscious extracts available data from reliable sources, providing users with the opportunity to create better investment strategies. Through our own unique data analysis, we provide more information to help investors find more opportunities and build quantitative strategies that can adapt to the cryptocurrency market.

We also recognize that the cryptocurrency market requires a different strategy. The market changes rapidly, making historical data less useful compared to traditional markets. A strategy that worked in 2016 is less likely to work in 2018.

Further, Coinscious helps investors in the traditional market understand and adapt to the crypto market using AI-driven data analysis. Finding useful data is crucial to this market. Quantitative traders have to create strategies based on the data they can access. In this market, patterns and insights change all the time. It’s hard to accumulate historical data, since many cryptocurrencies have only short histories. This demands a quantitative trading strategy that differs significantly from strategies used in traditional financial markets.

 

Coinscious in Beijing

How To Stay Ahead In A Bearish Coin Market

By | Events | No Comments

As the once-hot cryptocurrency market has cooled, investment has cooled, as well. As the downward market trend continues, investors face a bear market, wondering what their next moves should be. Some investors hope cryptocurrency tycoons will raise prices and help them out. Yet the pioneers in this market, who have access to the world’s leading investment advisory tools, don’t feel the burden of the bear market. When the market is bad, they don’t lose much. When the market is strong, they win more than average. As a blockchain and AI-driven tool designed for the cryptocurrency market, Coinscious filters complicated market information, draws effective conclusions from it, and recommends strategies to users. With this information at hand, users can not only protect their capital but also profit during a down market.

One motivating factor behind our global tour has been to let more investors know that the current situation is solvable. The goal has been to let more investors experience the advantages that Coinscious offers.

On August 17, 2018, a closed-door investment meeting of quality blockchain projects was held in Beijing Haidian Quanpin Mansion. As a leading international AI and blockchain intelligent investment advisory project, Coinscious was invited to attend and received interest and accolades from experienced Chinese investors gathered there.

Our CSO, Janson, spoke at the event, giving an example of what we call the “Coinscious Lab”, where we conduct experiments, analyze them, and share the results with the public. Janson shared our latest Coinscious Lab experiments including arbitrage, short term price prediction, correlation between social sentiment and price change, token correlation analysis and orderbook analysis. The attendees really enjoyed seeing the successful results.

After learning more about how the Coinscious platform worked, investors showed high interest in our business model. They also expressed their willingness to try our service after launch. Many investors expressed their hope of being able to upgrade their trading experience and results using our tool.

Several investors and participants in the blockchain community were in attendance, including OK Capital, AKHacks, Tfund, ValueNet Capital, FBG Capital, WBO, GVC, BQEX, BlockOrigin Capital, ValueNet Capital, MPT, AFund, OnFund and many others. As has been true at every stop of our global tour, the Coinscious team has been inspired and motivated by the enthusiasm that always greets our presentations. Excitement is being generated around our platform everywhere we go. That fervor has sparked our team’s passion for what we do making us more focused than ever on continuing to create a platform that helps resolve some of the biggest issues investors face in the cryptocurrency trading market.

At this event, Janson participated in a Q&A session. Below are a couple of highlights from that interview.

Q1: From what I understand about Coinscious, it seems your business does not rely much on blockchain technology itself. Yet there are many existing companies that offer data service to exchanges, funds, or cryptocurrency investors. What makes Coinscious different?

A1: Currently, we run more like a centralized project. However, we hope to have decentralized data sharing that networks with the whole community in the future. The data itself requires a large amount of storage so it is not practical to centralize that storage. Regarding offline data analysis such as simulations, it does not require fast data retrieval. This means that there are many data storage approaches that can work in this case. In order to reduce the pressure from a high demand for large data storage and AI computation resources, we would like to leverage the capacity of the community as a resource. IPFS protocol and computation nodes will be introduced so that community members can contribute storage and processing power respectively, and get rewards in return.

Q2: Who is your major target market—individuals or institutions? Do you already have a user base?

A2: At this stage, our biggest clients are institution funds and quantitative teams that buy our data. Just as people asked during our tour of the United States as well as in Shanghai, how do you sell the data? What data do you have? They would like to use this data immediately, including the currencies and exchanges that we have access to. With this high demand, our data service will be launched in two months, and sales should be easy to achieve.

On the other hand, we will also offer a tool for general users to track and manage their assets. It will be a free tool to help get more people interested and using cryptocurrencies, while also educating them. This is an important step in helping the market stabilize and mature.

 

Coniscious Finwise Hong Kong Summit

Coinscious at the 2018 Finwise Hong Kong Blockchain Summit

By | Events | No Comments

Another stop on our summer tour—our team attended the Finwise Summit in Hong Kong, one of the most influential blockchain summits that takes place in China. The two-day summit is a high-profile gathering of blockchain industry thought leaders. The event is co-sponsored by FINWEX, Gaofeng Ventures, Ant Node Alliance, Funkeypay, Ji Kexing KAC, and Hong Kong Emerging Technology Education Association. 

Our CEO, Tom Bao, delivered a keynote at the summit. Tom introduced the Coinscious Collective™ platform to the crowd, explaining how it will be used to overcome a number of existing obstacles in the digital currency market. Tom noted that many current problems in the market can be overcome through the power of AI. He walked through an automatic arbitrage trade showing how an investor can make a smarter trade when informed by uncertainty, time, and opportunity forecasts.

Coinscious Tom Bao Finwise Hong Kong

Our CEO Tom Giving A Speech At The Finwise Hong Kong Blockchain Summit

 

Coinscious Advisor Derek Manuge Saying How Coinscious Is At The Forefront Of Blockchain Investment Industr

Coinscious Advisor Derek Manuge Saying How Coinscious Is At The Forefront Of The Blockchain Investment Industry

 

Coinscious' Tom Bao Showing Real World Examples Of Cryptocurrency Arbitrage

Coinscious’ Tom Bao Showing Real World Examples Of Cryptocurrency Arbitrage

 

Tom demonstrated how our platform can monitor events such as 24/7 blockchain movements and follow the corresponding pattern recognition and event analysis. Inside our platform, the AI-driven rating is based on user risk preferences and ROI expectations. Tom also noted how Coinscious monitors and tracks the balance of blockchain wallet accounts, sends alarms related to specific events, and helps amateur and professional traders create their own trade strategy execution simulations. The purpose of the Coinscious Collective™ platform is to integrate big data, AI, and blockchain tech as a way to give users more intelligent and data-driven investment tools.

 

While touring events like this in Canada, the US, parts of Europe and Asia this summer, we’ve been encouraged by the excitement of the crowds when they hear about Coinscious. People are grasping the promise inside the tools  and platforms that we’re creating. In turn, we’ve learned a lot from the thought leaders and attendees at these crowds, and been inspired by their energy and enthusiasm. When we get back to Canada, we look forward to applying that inspiration to our work to make the Coinscious Collective™ platform even better.

Coinscious on Nasdaq NYC

Coinscious on the NASDAQ Big Screen in Times Square

By | Events | No Comments

On August 9, Coinscious appeared on the NASDAQ big screen in New York City’s Times Square. Given our summer tour that has spanned from Canada to US to Europe and all over Asia, it seems appropriate that our logo would make its appearance at the landmark known as the “crossroads of the world.” At Coinscious, we want our brand to represent our extensive work in artificial intelligence, big data, and blockchain as the building blocks for our Coinscious Collective™ platform. These technologies drive cryptocurrency markets and represent a another kind of global crossroad—a level and open playing field rich with opportunity. Our passion for these fields are why we’ve spent time going from country to country this summer, connecting with thought leaders and spreading our message.

Our core team at Coinscious, headquartered in Canada, is composed of experts in blockchain, AI, and big data. Our Coinscious Collective™ platform uses AI to build statistical models. It also uses machine learning to take advantage of financial engineering, quantitative trading, and risk management techniques. In this way, the platform provides investors with a smart, efficient, secure platform for digital asset management and AI-powered investing.

Coinscious has created products and services to help investors find useful and timely market information, manage their assets and investment plans, forecast prices and create quantitative strategies. We created this platform to meet the needs of everyday investors and professional institutions who need to make the most of their time and resources. It’s our hope that, in the future, Coinscious will also aid in the compliance, rapid development, and progress of the digital asset investment market. But for now, we’re really just enjoying seeing our logo light up Times Square.

Shanghai Blockchain Expo

The Coinscious World Tour: Shanghai, China

By | Events | No Comments

Coinscious made their first appearance in Asia at the China Wealth Management Ecology Conference, held August 3rd, 2018. The conference was co-sponsored by Fortune Magazine, Private Equity Forum CPF100, and the Shanghai Branch of the Shanghai Enterprises (Commerce Association).

Roughly 300 attendees, drawn from regulatory authorities, domestic and overseas asset management institutions, financial technology companies and private investors, gathered to celebrate the theme of “New Technology, New Fortune, New Future.”

Our Co-Founder and CEO, Tom Bao, and Global Marketing Director, David Buell, delivered our keynote entitled “Financial Technology Innovation — AI Artificial Intelligence + Blockchain.” They updated attendees on the progress of Coinscious.

Cryptocurrency investors face several pain points such as volatility, overwhelming amounts of data, inefficient asset management, security incidents, and a lack of adequate tools. Coinscious will solve these challenges by providing big data services, market information, asset management, and other useful services.

Coinscious Marketing Director, David Buell, and CEO, Tom Bao, speak on the power of AI and blockchain.

 

During the conference, Mr. Wenpu Dai, who is the deputy director of the blockchain value Internet innovation application laboratory at Tongji University, hosted a panel discussion on the topic of “a blockchain-driven future.” Our Co-Founder and CSO Janson Jiang, WhaleChain Founder & CEO Sun Huanhuan, Hong Kong Jubilee blockchain technology consulting company COO Xie Yingying, and Juehu Technology CEO Wei Wu, with the host, shared their respective views and insights on blockchain technology.

 

Coinscious Co-Founder and CSO, Janson Jiang, discusses “a blockchain-driven future” with other panelists.

Also during the conference, Fortune Magazine announced the “2018 China Finance Value List.” Coinscious emerged as a leader among numerous blockchain projects and won the “Fintech Innovation Award.”

 

Coinscious was honored to receive the Fintech Innovation Award.

Conference attendees were receptive to the Coinsicous project, and the event generated buzz about the company by the region’s media. Read some of their reports below:

http://cj.sina.com.cn/articles/view/5333511944/13de6ef0800100br78

https://kuaibao.qq.com/s/20180806A12VNK00

https://www.toutiao.com/i6586505504862765581/

https://www.toutiao.com/i6586514137537315335

Blockchain and cryptocurrency is a worldwide phenomenon drawing the attention of investors and finance managers around the globe. We at Coinscious are excited to be part of this emerging sector and look forward to the role we will play in helping finance leaders and investors navigate the coin market in smarter ways.

Coinscious Labs Arbitrage

Coinscious Labs: Arbitrage

By | Coinscious Labs | No Comments

The Challenge of Arbitrage in Crypto Markets

People get excited when they hear about arbitrage opportunities in the crypto market. That excitement is driven by frequently seeing big price differences between exchanges. If you have coding skills, you might think taking advantage of those price differences using arbitrage will be a piece of cake.

The real challenges come as you write, test, and run your code against exchange accounts. Here are just a few of the challenges that come from trying to execute an arbitrage strategy in the crypto market.

Simulation Accuracy

Most developers use simulations to verify their ideas and coding. However, depending on how you execute your simulation, your simulation results might be quite different from your real-world  results. For example, if your simulation is based on the order book (open buy and sell orders), your simulation result might be totally misleading.

Placing Orders

When you see price differences between exchanges, do you check price differences in the order book as well? Do you know if your orders will actually be fulfilled or the timing of those orders?

Capturing Future Opportunities

After you make some arbitrage transactions, you might find one exchange price is always higher than another. Opportunities to take advantage of arbitrage may decrease. How will you continue to profit with limited funds and fewer opportunities?

Technical Challenges

The crypto exchange is not like the stock exchange. Most crypto exchange APIs are not designed for high-frequency trading. Some APIs are poorly designed and unstable. The exchange may go down. The API server could stop responding. Perhaps internal logic or a limit is changed on the exchange side. There are many scenarios where API calls fail. It might be harder than you think to execute a robust arbitrage program without human interaction.

Weighing the Risks

Transaction fees are not cheap in crypto exchanges. If you have transaction success in one exchange, but failed transactions in another, you could lose money very quickly.

Profit Expectations

Of course, everyone would like to know if profit expectations through arbitrage are real and reliable. Many variables come into play when answering this question.

Choosing an Arbitrage Coding Strategy

In addition to two-point arbitrage, you also might hear about triangle or multiple-point arbitrage. Do you understand which strategy is best for you? Does fund size affect your arbitrage strategy? What is the proper fund size you should try? Answering these questions might be harder than you thought.

Bot Parameters

The parameters used by trading bots are also important. There is no “one size fits all” bot that can simply run for you all day every day. Bot parameters have to be set, tested, optimized, and then put into practice in the real world.

Experiment Goal

In this lab experiment, we conducted an arbitrage experiment to determine how to overcome the challenges mentioned above. This lab experiment will also verify what kind of data support is needed to maximize profit and minimize risk.

Profit Snapshots 

Coinscious Labs Arbitrage

This image shows the total amount of transactions completed per day.

 

Coinscious Labs Arbitrage

This image shows a breakdown of all 36 transactions from January 14. The highlighted price in the top right of the image shows that we bought 13.46 LSK at a price of 0.00194800 BTC, on Binance. Correspondingly, this transaction is shown in the Binance transaction history in the snapshot below.

 

Our results in the Binance transaction history

 

Experiment Results

We ended the month with a profit of +0.81616874 BTC (+55.34%), and +80.02477571 LSK (+8.07%).

We see our transactions in the real world, fully automated, with a dynamic configuration of different variables and parameters.

This lab experiment was conducted on several combinations of currencies (such as: BTC/LSK, BTC/USD, BTC/IOTA, BTC/ETH) and on different exchanges.

All experiments were successful. In this Coinscious Labs experiment, we looked at the results of our BTC/LSK arbitrage. For data and information on other experiments, please contact us.

Coinscious Labs Arbitrage Results

Here we see the accumulative results of arbitrage for each day during the month of January.

 

Future Development

Based on different experiments completed by Coinscious Labs, the Coinscious product team will create new product designs that cover the various needs in crypto arbitrage. These designs will not only help traders capture more opportunities, but also will optimize the process through simulation, AI optimization, profit estimation, and so on.

 

The Coinscious Summer Tour  – July

By | Events | No Comments

For us here at Coinscious, this has been the summer of conferences and expos. We’ve been on an international tour  —  Amsterdam, Atlantic City, Montreal, San Francisco, DC, and Krakow. Our goal: to show businesses the new Coinscious Collective™ platform and services, and to connect with thought leaders doing groundbreaking work with blockchain and cryptocurrency.

First up was the Blockchain Expo in Amsterdam, packed with 8,000 attendees. Day one focused on ICOs and cryptofinance, while day two focused on the effect of blockchain on insurance, banking, and payment options. Both days delivered insight on how blockchain tech is transforming existing business models. There was also significant focus on challenges developers face as they try to build blockchain apps.

David Buell and Binh Ho

David Buell (Coinscious Marketing Director) and Binh Ho (Coinscious COO) at the Blockchain Expo in Amsterdam, Netherlands

Between conferences, our CTO, Daniel Im, made his way to Atlantic City for the Blockchain World Conference. There he listened to leaders weigh in on potential US blockchain regulations. He also offered his congratulations to Amir Dossal for winning the Blockchain Humanitarian award, an aware created to  honor leaders who are using blockchain technology to solve real-world challenges.

Allison Shealy (Attorney at Shulman Rogers), Daniel Im (Coinscious CTO), and Amir Dossal (‘Blockchain Humanitarian’ Award Winner)

From there, we attended Startupfest in Montreal. This has been called “a music festival for startups” by Reddit Founder Alexis Ohanian. The event takes pride in rethinking how conferences should be done. It’s a place where startups can shine, make connections, meet interested investors, and learn from others who have successfully navigated their own startup journey. While there, our CTO, Daniel Im, discussed how to bridge the gap between AI research and the AI industry.

Daniel Im (Coinscious CTO) at Startupfest Montreal

Next, it was on to San Francisco for Distributed 2018, where we were a sponsor. Distributed focuses on the power of the decentralized business and aims to bridge the gap between Eastern and Western blockchain initiatives. At one panel, leading cryptocurrency exchange leaders discussed the quickly changing landscape surrounding the coin market, its infrastructure, regulations, and oversight.

Coinscious was a sponsor at Distributed 2018 in San Francisco. Shown here are Binh Ho (COO), Agnieszka Osuch (Communications Manager), Daniel Im (CTO), and Ena Vu (Project Manager).

Cointime interviewed Coinscious at Distributed 2018. With Ethan Skowronski-Lutz, David Buell (Coinscious Marketing Director), Binh Ho (Coinscious COO), and John Gidding.

Also at Distributed, Daniel connected with Bianca Chen, who is currently executive producing the docuseries “Next: Blockchain.”

Bianca Chen (“Next: Blockchain” Executive Producer  — middle left), Daniel Im (Coinscious CTO — middle right)

In Krakow, Poland, our team hosted an event for local blockchain and cryptocurrency enthusiasts. Our COO, Binh Ho, spoke to attendees about AI and data-driven insights for the coin market.

Binh Ho (COO) hosting a blockchain event in Europe

On this tour, we met a lot of amazing people and companies. These interactions showed them that, now more than ever, there’s a need for our platform. The blockchain industry is really starting to develop. Thought leaders and professional and amateur investors are looking for a platform like the Coinscious Collective™ that can help them navigate and respond to the nuances, complexity, and volatility of the coin market.

Our whirlwind summer tour isn’t over yet. During August, the team will be in Asia, connecting with people passionate about blockchain and cryptocurrency. We’ll also be in Las Vegas at BlockShow. Be sure to follow our journey on social media!

Cryptocurrency Arbitrage

What is Arbitrage?

By | Cryptocurrency | No Comments

What Is Arbitrage and How Is It Used in the Coin Market?

The Merriam-Webster dictionary defines arbitrage this way:

The near simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies.

Let’s break that down further and also understand how arbitrage strategies are used in the cryptocurrency market.

A Simplified Explanation of Arbitrage

Arbitrage is considered a no-risk profit strategy when executed against traditional financial instruments. Why? Because you are buying an asset and selling it simultaneously for a higher price at a profit. It’s considered no risk because there is no hold time or delay between the transactions and the profit is guaranteed.

This type of transaction can be completed with any asset type, but typically the assets are bonds, stocks, currency or other financial instruments.

Here’s a simplified example. A stock is trading for $10 in the New York Stock Exchange (NYSE), but is trading on the Tokyo Stock Exchange (TYO) for $11. You would buy the NYSE stock at the lower price and simultaneously sell the stock in the TYO, making a $1 profit per share.

Because of automated trading systems and high-frequency trades it’s rare for this sort of price discrepancy to occur, making it rare for arbitrage trades like this to happen. Today, when these discrepancies are noticed, they usually only last for a short window of time, measured in seconds or even microseconds. High interest in the “cheap” stock raises its price and subsequently drives down the price of the “expensive” stock. Even before automated trades, arbitrage was viewed as a mechanism for maintaining equilibrium across markets.

What Does Arbitrage Have to Do with Cryptocurrency?

Unlike the stock market, the coin market is ripe for arbitrage. Cryptocurrency don’t support high-frequency trading, which means there are fewer automated trading robots controlling or responding to price fluctuation. There are fewer pressures or controls to ensure pricing equilibrium across exchanges. Also, when new exchanges open, they offer an opportunity to buy in a more established exchange to sell at a profit in the new exchange.

If you plan to pursue arbitrage as a trading strategy, there are three things you must consider:

  • Fees. This can include trading fees, withdrawal or deposit fees, and blockchain fees. You have to calculate if the fees you incur will eat the profit that you anticipate making.
  • Time. Rarely do trades happen simultaneously in the coin market as they can in the automated stock exchanges. You have to weigh the risk that you’ll miss the pricing window if a trade is slowed down for some reason.
  • Risk. Arbitrage in the stock market is considered no risk. Because of the time and fee considerations mentioned above, arbitrage in the coin market is hardly a no-risk venture.

What Do You Need to Profit from Coin Arbitrage?

Reliable information about cryptocurrency is one of the most valuable assets you can possess. In this relatively new market, it’s also one of the hardest assets to find.

If you plan to use arbitrage in the coin market, what information and tools should you look for?

  • Rates: To benefit from arbitrage, you’ll need to know current rates of exchange. Seek out information sites that provide up-to-date coin prices.
  • Opportunities: Try to access a service that can send alerts about potential opportunities. Alerts can help you act on opportunities before other traders do.
  • Simulations: Success in the coin market relies on creating and executing smart trade strategies. Simulation tools can help you validate and improve your trade strategies.
  • Bots: Automation helps traders stay on top of market changes. You can use bots set up to take specific actions based on limits that you set.

You may need nerves of steel to execute coin arbitrage, but having reliable, credible information should remove at least some of the guesswork.