Arbitrage elimination describes the process where market inefficiencies, allowing for risk-free profit from price differences across exchanges, are removed. This occurs as automated trading systems and active participants quickly identify and execute arbitrage opportunities. Their actions rapidly adjust prices, bringing them into alignment across different trading venues. The result is a more uniform pricing structure for assets.
Context
In cryptocurrency news, arbitrage elimination is a recurring topic when discussing market efficiency and the maturation of trading infrastructure. The rapid closing of price discrepancies indicates a liquid and well-integrated market environment. This process reduces speculative advantages and contributes to overall price stability for digital assets.
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