Cross-market arbitrage is a trading strategy that capitalizes on temporary price differences for the same asset across various exchanges. Traders simultaneously buy the asset on one market where it is cheaper and sell it on another where it is more expensive. This activity helps to synchronize prices and enhance market efficiency. It requires rapid execution and access to multiple trading venues.
Context
In the fragmented digital asset landscape, cross-market arbitrage is a common practice that helps establish price equilibrium for cryptocurrencies. News reports sometimes mention the impact of arbitrage bots on market liquidity and volatility across different exchanges. The speed and efficiency of these operations are continuously optimized by sophisticated trading firms.
The new AI-driven aggregation layer abstracts multi-market data and liquidity, fundamentally improving capital efficiency and price discovery in the prediction market vertical.
The DAT model leverages traditional finance to securitize digital asset exposure, optimizing corporate balance sheets for inflation hedge and new capital efficiency.
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