What Is the Role of Stablecoins in Facilitating Cryptocurrency Arbitrage?
Stablecoins play a critical role in facilitating cryptocurrency arbitrage. They provide a stable unit of account and a low-volatility bridge between different cryptocurrencies and exchanges.
Arbitrageurs can quickly move value between trading venues using stablecoins like USDT or USDC, without being exposed to the price volatility of Bitcoin or Ethereum during the transfer. This speed and stability are essential for capturing fleeting arbitrage opportunities.
Stablecoins also serve as the primary collateral and settlement asset on many derivatives exchanges, making them an integral part of the infrastructure for cash-and-carry and other arbitrage strategies.
