Definition ∞ Arbitrage involves concurrently buying and selling an asset across distinct markets to capitalize on small price differences. In cryptocurrency, this typically means acquiring a digital asset on one exchange where its price is lower and immediately selling it on another where it trades at a higher value. This approach seeks to exploit temporary market inefficiencies.
Context ∞ Arbitrage remains a fundamental trading approach in crypto markets, contributing to price balance across various exchanges. High-frequency trading firms and automated bots often execute these operations, frequently causing rapid price adjustments. Regulatory examination regarding market manipulation and the speed of execution continue to influence arbitrage possibilities and their implementation.
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