Why Are Large-Cap Cryptocurrencies Generally Less Prone to Sustained Arbitrage Opportunities? ⎊ Path

Why Are Large-Cap Cryptocurrencies Generally Less Prone to Sustained Arbitrage Opportunities?

Large-cap cryptocurrencies like Bitcoin and Ethereum are traded on numerous, highly liquid exchanges, attracting significant institutional and HFT activity. This high level of trading volume and competition ensures that any price discrepancies are quickly identified and exploited.

The high liquidity also minimizes slippage, making the market more efficient. Therefore, arbitrage opportunities are smaller and more fleeting compared to illiquid altcoins.

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Glossar

Price Discrepancies

Detection ⎊ Identifying these variances involves continuous, high-frequency comparison of asset prices, implied volatilities, or funding rates across different exchanges or derivative contracts.