• Home
  • Blockchain
  • Crypto
  • Defi
  • NFT
  • Trading
  • World News
  • Contact
What's Hot

Turkey’s Defense Industry Experiences Rapid Growth and Record Arms Exports

March 28, 2023

How Rising Tobacco Prices are Affecting Smoking Cessation Around the World

March 8, 2023

Is it possible to buy NFT and help the Ukrainian army at the same time?

February 17, 2023
Facebook Twitter Instagram
  • Home
  • Blockchain
  • Crypto
  • Defi
  • NFT
  • Trading
  • World News
  • Contact
CryptodailyNews24
  • Home
  • Blockchain
  • Crypto
  • Defi
  • NFT
  • Trading
  • World News
  • Contact
CryptodailyNews24
Home»Crypto»Arbitrage opportunities in DeFi
Crypto

Arbitrage opportunities in DeFi

Donald MunnBy Donald MunnJune 18, 2022Updated:September 29, 2022No Comments3 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email

In a crypto market deep in the red, some opportunities are arising for experienced traders. Many investors are discovering arbitrage opportunities in DeFi, a technique that trades the price disparity between ETH and a related product.

DeFi offers arbitrage activities to investors

Simply put, crypto arbitrage exploits temporary inefficiencies in asset prices during short intervals when a currency is available at different prices at the same time. The currency is bought on the exchange where the price is lower and sold on exchanges where the price is higher to generate a profit.

Specifically, there is a token on the market, stETH, which represents staked Ether. It was launched in late 2020 by the dApp Lido Finance and has become one of the most popular collateral assets for lending and borrowing on the DeFi markets.  

According to many experts, the decline of this token is one of the causes of the liquidity difficulties that platforms such as Celsius are experiencing. It is no coincidence, according to others, that Ethereum itself is underperforming the market, dropping below $1,100.

According to crypto data company, Caiko, the token’s decline is also attributed as the main driver behind Celsius’ decision to halt swaps on its lending platform. The hedge fund Three Arrows Capital, which is going through its own liquidity crisis, also reportedly sold part of its stETH token.

But according to blockchain data and market participants, cryptocurrency traders are increasing their positions in stETH as selling pressure mounts on the markets and on Ethereum, which seems to have been unable to get back above $1,300 for days.

Arbitrage on stETH explained in brief

Many traders are taking advantage of the discount as an arbitrage opportunity as stETH will become redeemable 1-to-1 on Ether after the so-called Merge – the Ethereum network upgrade that changes the protocol from proof-of-work to proof-of-stake – according to Rahul Rai, co-head of market neutral at crypto fund BlockTower Capital.

Rai stated that:

“If you can buy stETH at 0.85 to Ether and you believe the Merge will happen in a realistic time frame, that’s a 15% return”.

Traders in particular are bullish on stETH which is being traded at a discount compared to a few weeks ago, according to data from blockchain data analytics platform, Nansen. The number of those digital wallets holding stETH reached a high of 101 on Wednesday, up from a count of 88 on 7 June.

Andrew Thurman, head of content at Nansen, referring to large companies such as Celsius and Three Arrows, said:

“Plenty of smaller players are playing the [arbitrage trade] as these whales flop around”.

The post Arbitrage opportunities in DeFi appeared first on cryptodailynews24.com.

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
Donald Munn
Donald Munn
  • Website

Related Posts

The best PR films to inspire your crypto marketing strategy

January 2, 2023

Japan: tax breaks proposed for crypto investors

September 1, 2022

Bitcoin may have hit its low after Powell’s speech

September 1, 2022

Ripple’s plans to tokenize land in Colombia did not take off

September 1, 2022
Add A Comment

Comments are closed.

Advertisement
Top Posts

Subscribe to Updates

Get the latest sports news from SportsSite about soccer, football and tennis.

The latest news about Bitcoin, ICO, blockchain and fintech.

Top Insights

Turkey’s Defense Industry Experiences Rapid Growth and Record Arms Exports

March 28, 2023

How Rising Tobacco Prices are Affecting Smoking Cessation Around the World

March 8, 2023

Is it possible to buy NFT and help the Ukrainian army at the same time?

February 17, 2023
Get Informed

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

  • Home
  • Blockchain
  • Crypto
  • Defi
  • NFT
  • Trading
  • World News
  • Contact
© 2023 cryptodailynews24.com Submit news release

Type above and press Enter to search. Press Esc to cancel.