Arbitrage trading is where you exploit the difference in bitcoin price between two markets. We have numerous places to buy bitcoin in South Africa, but did you know that it is sometimes between 1.5% – 5% cheaper on overseas markets than locally?
What exactly is Arbitrage trading?
As an arbitrage trader, you can buy cryptocurrency on an overseas market at a cheaper rate, sell it locally in South Africa at a higher price, and pocket the difference in price between the two platforms. Essentially its free money!
Everyone in South Africa is allowed use their Single Discretionary Allowance (SDA) to send a maximum of R1 million overseas per year. If you get a tax clearance certificate, you can send an additional R10 million per year using your Foreign Investment Allowance (FIA), taking your total up to R11 million per year.
Depending on the difference in price, you can potentially make around 5% profit on R11 million per year, that is R550 000 a year for free! Your spouse could do the exactly same, making you an estimated income of over R1 million a year for your household, essentially for free!
What are the steps for bitcoin arbitrage trading:
- Have a fully verified account on both a local and overseas exchange platforms
- Use your ZAR to buy USD Forex locally, and deposit it into the bank of the overseas platform
- Trade the USD for Bitcoin and send the bitcoin to your wallet on the local exchange in South Africa
- Trade the bitcoin for ZAR at the higher rate to get profit
While this process sounds easy, it can be daunting for new people, as well as technically challenging and quite complicated to co-ordinate.
Due to the volatility of the bitcoin price, there is also the risk that you could end up losing money if things dont go well.
How can you arbitrage more easily and with less risk?
OVEX is a cryptocurrency exchange based in Cape Town South Africa specializing in OTC trading and arbitrage that enables you to buy, sell, store, transfer and earn interest on your cryptocurrency.
In addition to the basic exchange services, OVEX makes the process of Arbitrage trading extremely easy to do with their Automated Arbitrage Service that they offer.
Since starting in 2017, things have been growing rapidly, with OVEX moving over R2 billion of customers money per month by the end of 2020, and now double that to more than R4.5 billion in 30 Day OTC volume.
The automated crypto arbitrage service offered by OVEX is able to mitigate the risks involved, and allows South Africans to make up to 5% per week with guaranteed profitability even during periods of high volatility.
OVEX makes use of a stable-coin called True USD (TUSD) in order to do their arbitrage quickly and profitably without the worry of wild price fluctuations you might get with bitcoin.
The OVEX arbitrage automated service allows tax compliant customers guaranteed profit, with zero risk to their capital, and with very little to no effort on the customer side.
In order to participate, customers authorize OVEX to trade on their behalf, repeating the process over and over until their foreign investment allowances of up to R11 million are used up for the year.
How much does it cost to arbitrage with OVEX?
The fees on the OVEX platform are extremely reasonable, with a maximum of 1% spread charged for everything.
The spread is reduced if the arbitrage premium is low in order to make sure that customers always make a profit. If there is ever a loss, OVEX will cover it on their side, so the capital used is always guaranteed!
Key reasons to use OVEX automated arbitrage:
- The arbitrage process is fully automated
- Profit is guaranteed even during periods of high volatility
- No risk to your capital
- Low spread of up to 1% maximum