Crypto Arbitrage Exchanges Could Become the Future of Crypto Trading

Since Bitcoin launched, thousands of others have been brought into existence. Globally, a market cap of cryptocurrencies within the first three months of 2020 is ranging from around $81 to $195 billion, with BTC price ranging from around $4,100 to $10,457, according to CoinMarketCap. Bitcoin still accounts for around 65% of the total market.

Earlier in 2020, Bitcoin, the world’s first and oldest cryptocurrency, turned eleven.

Since Bitcoin launched, thousands of others have been brought into existence. Globally, a market cap of cryptocurrencies within the first three months of 2020 is ranging from around $81 to $195 billion, with BTC price ranging from around $4,100 to $10,457, according to CoinMarketCap. Bitcoin still accounts for around 65% of the total market.

A whole micro-industry has emerged around cryptocurrencies. More mainstream investors than ever include these as an investment asset class, albeit one considered higher risk than others. With the right strategy, cryptocurrency trading can prove lucrative and one way to boost a portfolio with short and long-term trades.

The Future of Cryptocurrency for Investors?

As with any new investment asset class, cryptocurrency has experienced ups and downs. Many investors and traders still see it as too high risk. Surely crypto trading needs to be performed with necessary caution and enough level of education in this sphere.

Now governments and financial regulators are talking about regulating these currencies more closely; in China, India, Japan, South Korea, and many other countries.

In the U.S., the Financial Crimes Enforcement Network (FinCEN) started to bring cryptocurrency exchanges up to the same level of scrutiny as money transfer agencies, in 2013. York’s Department of Financial Services took further action to ensure exchanges aren't being used for money laundering and financial fraud.

Other moves are potentially afoot to make them more mainstream. There is even speculation that “that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies,” according to Investopedia.

Harvard University Professor of Economics and Public Policy Kenneth Rogoff, a crypto advocate, believes that the total “market capitalization of cryptocurrencies could explode over the next five years, rising to $5-10 [trillion].”

However, that is only likely if mainstream and institutional investors put more into crypto, which is more likely to happen if a number of factors come into play.

Could Crypto Become Mainstream?

To answer this question, we need to remember the reason cryptocurrencies were established. People wanted a way of moving money, and even exploring new business opportunities, without excessive regulatory oversight and the guiding.

Traditional financial institutions have taken an interest in cryptocurrency. However, it does result in a fundamental flaw, as far as investors and banks are concerned.

In 2019 Facebook announced cryptocurrency named Libra, which is planned to be backed by financial assets, and its launch is planned to be in 2020. Facebook considers it will become a global cryptocurrency for many people, especially those in developing countries who have limited access to financial services. Since its announcement, Libra has faced criticism and opposition from central banks, and is facing various legal challenges. The impact of Libra on the cryptocurrency market can be assessed after its final implementation.

Traditional investment vehicles, whether stocks and shares, funds, insurance, reinsurance, and dozens of other options, need to go through rigorous compliance procedures. One of the fundamental elements of this is the almost universal Know Your Customer (KYC) rule, as a safeguard against money laundering and financial crime. How can cryptocurrencies have this when the premise is that the owners of any coin or token are meant to be anonymous?

In the long-term, this is a surmountable challenge that exchanges and regulators can solve, and will solve, if crypto is to become a mainstream investment asset class. Extra layers of security are needed. And as a form of self-regulation, this is one way to reduce the impact of bad actors and those who would undermine everyone’s financial safety.

Another challenge is fragmentation. There are dozens of exchanges on the market. Some are built on more traditional web-based platforms, whereas others are built on Blockchain platforms. Some of them have the same tools and functionality. Some of them work the same way, so if crypto traders figure it out on one platform, they aren't necessarily going to take the time to work out how to use another.

With this market fragmentation, it can put crypto traders off. Is there a long, or even short-term, solution?

Introducing Cryptocurrency Arbitrage to Crypto Exchange Platforms

One solution, that has been floating for a while is the development of a verified exchange traded fund (ETF). An ETF could potentially make it easier for more people to consider cryptocurrency trading, providing the demand was there, and it was promoted the right way.

Another solution is to bring together crypto exchanges. Instead of fragmentation, give traders the ability to use arbitrage to benefit from price fluctuations and differences between exchanges. In the same way that traders can between fiat exchanges, or currencies.

In crypto, every movement makes a difference, and because prices change rapidly, there are a lot of gains that could be made if crypto traders had the right tools at their disposal. Another way traders benefit on traditional exchanges is the ability, using a range of built-in and third-party apps, to share ideas and collaborate.

One way crypto traders can benefit from arbitrage between exchanges, and using multiple exchanges on one platform, is with Torex.One.

Torex.One Cryptocurrency Trading Platform

Torex.One crypto trading platform has developed a set of crypto trading tools than can make crypto trading easier and informative. More crypto trading tools are planned to be released within 2020.

With Torex, crypto traders can benefit from trading on multiple exchanges, using cryptocurrency arbitrage, trading multiple currencies, and benefiting from a diverse range of cryptocurrency trading tools, such as API-trading (with possibility to simultaneously place Stop Loss and Take Profit orders; implement Trailing Stop algorithm), price checker tool, Telegram-based price notification tool, cryptocurrency arbitrage tool (analyzes the liquidity of order books on multiple crypto exchanges and searches for crypto arbitrage windows), with some more crypto trading tools to be released.

With the web version of the Torex platform already operational, crypto traders are able to trade across 6 exchanges so far (Binance, Bitfinex, Bittrex, Huobi, KuCoin and Poloniex) with 17 more to come in 2020.

By the end of 2020 Torex.One plans to release a fully functional mobile trading app. To date all developed features are available at no cost.

You are welcome to create a crypto trading account with Torex.

When it comes to getting more retail and institutional investors and traders onboard, with a view that crypto is handled the same as other asset classes, it needs to be as simple as possible. Simplicity and security are important for dealing with cryptoexchanges and cryptocurrencies, which is why one crypto trading platform that engages with as many as possible, with a suite of convenient and easy-to-use trading tools, is the way forward for mainstream investors and traders.