What Is Triangular Arbitrage in Cryptocurrency Markets?

Triangular arbitrage involves exploiting price discrepancies between three different cryptocurrencies on the same exchange. A trader starts with one asset, trades it for a second, then trades the second for a third, and finally trades the third back to the original asset.

If the final amount is greater than the initial amount, a profit is made. This strategy avoids the delays and fees of moving assets between exchanges but requires quick execution as these opportunities are often fleeting.