Crypto arbitrage: a €10 price edge loses out to trading fees

Crypto arbitrage means buying the same coin more cheaply on one exchange and selling it at a higher price on another, pocketing the price difference as profit. The idea sounds like risk-free money, and advertisements sell it in exactly those terms. Our own calculation using real prices shows the opposite: on Thursday evening, November 5, 2026, the largest price gap for Bitcoin across four major euro exchanges was around €10 per bitcoin. Trading fees for buying and selling €1,000 came to €10.50. A retail investor who had tried it would have walked away with a loss.

This article explains how price differences between crypto exchanges arise, works through a complete example including fees and transfer time, and puts the other forms of arbitrage in context, from triangular arbitrage to funding rates. It closes with what the German tax office expects to see on arbitrage profits.

What is crypto arbitrage? One coin, two prices

Arbitrage is the exploitation of price differences for the same asset in different places at the same time. Stock markets have known it for decades: when a share trades in both Frankfurt and New York, specialist traders iron out the smallest deviations within fractions of a second. The crypto market works the same way, except that instead of a handful of large venues there are hundreds of trading platforms, each with its own order book.

Because bitcoin trades independently on Kraken, Bitvavo, Coinbase and Bitstamp, its price on each of these exchanges can differ slightly for a moment. That is not a glitch; it happens because each exchange has a different set of buyers and sellers. Arbitrage is the force that pulls these prices together: whoever buys cheap and sells dear lifts the low price and pushes down the high one.

There is spatial arbitrage between two exchanges, triangular arbitrage within a single exchange across three trading pairs, and statistical arbitrage, in which algorithms trade patterns in price deviations. For retail investors, the spatial variant is almost always what is meant.

Order book, bid and ask: what a crypto arbitrage gap between exchanges consists of

Anyone who wants to calculate arbitrage cannot work with the "price" shown by apps and price websites. That figure is usually the last traded price. But you can only buy at the ask, the lowest sell offer in the order book, and only sell at the bid, the highest buy offer. The order book is the list of all open buy and sell orders on an exchange, sorted by price.

The distance between bid and ask is called the spread. It is the first hurdle for any arbitrage trade. A genuine arbitrage opportunity exists only when the bid on exchange B is above the ask on exchange A. If only the last displayed price is higher, that is often an illusion, because the spread already eats up the difference.

Then there is market depth, meaning the quantity actually available at a given price. Often only fractions of a bitcoin sit at the best ask. Buy more and you slip into pricier offers, which is known as slippage. For amounts of a few thousand euros it is small for bitcoin on large exchanges, but with small coins it can cost you the entire advantage.

Crypto arbitrage tested: bitcoin prices on four exchanges on November 5

On Thursday evening, November 5, 2026, we queried the public order books of Kraken, Bitvavo, Coinbase and Bitstamp for the bitcoin/euro pair three times, roughly one minute apart. The result of the first query:

The cheapest ask was on Kraken, the highest bid on Bitvavo. The gap was €10.10 per bitcoin, or 0.015 percent. In the two subsequent queries the largest gap was €6.09 and €6.80, that is 0.009 and 0.010 percent, with different exchanges on either side. A range of 0.009 to 0.015 percent is typical for a quiet evening on liquid exchanges. Larger gaps usually open only during sharp price moves, when one exchange briefly lags behind, or in small coins with thin order books.

Crypto arbitrage with €1,000: taker fees wipe out the profit

Suppose you had seized the moment to buy €1,000 worth of bitcoin on Kraken and immediately sell it on Bitvavo. For this to work without a transfer, you would already need balances on both exchanges: euros on Kraken, bitcoin on Bitvavo. That is how professional arbitrage traders operate too.

The calculation:

• Purchase on Kraken: €1,000 divided by €67,619.90 gives roughly 0.014789 bitcoin.
• Selling the same amount on Bitvavo at €67,630 yields €1,000.15. The gross profit is 15 cents.
• According to the Kraken fee schedule, Kraken charges 0.80 percent at the entry tier for a taker order, meaning an order that immediately fills against an existing offer. That comes to €8.00.
• Bitvavo charges 0.25 percent for taker orders at the entry tier, according to our survey of Bitvavo fees from October 16. That comes to €2.50.

The bottom line is 15 cents of gross profit against €10.50 in fees, a loss of €10.35. For the trade to pay at all at these fee levels, the price gap would have to exceed 1.05 percent, seventy times the measured figure. Rates fall with higher trading volume: Kraken charges 0.60 percent for taker orders from a monthly volume of $2,500 and 0.38 percent from $10,000. Even then, the threshold remains a multiple of the gap we observed.

With a maker order, meaning your own offer placed in the order book, fees are lower: 0.38 percent at Kraken's entry tier and 0.15 percent at Bitvavo. The catch is that a maker order is only executed once someone takes it up. By then the price gap may long since have closed.

Transfer time and network fees: the Bitcoin network as a crypto arbitrage bottleneck

If you do not hold balances on both exchanges, you first have to transfer the coins you bought. This is where arbitrage turns into a race against time. A bitcoin block is produced on average every ten minutes, and exchanges only credit a deposit once the transaction has a number of confirmations set by the exchange, meaning blocks written to the chain after it. Depending on the exchange, half an hour or more can easily pass. During that time the bitcoin price often moves by more than the entire gap.

Then there is the cost of the transfer. The network fee that miners receive for including a transaction was low on November 5: Mempool.space recommended just 2 satoshis per virtual byte for fast confirmation. Exchanges, however, usually charge their own fixed withdrawal fee. At Bitvavo it was €1.31 for bitcoin according to our survey, regardless of the amount. On €1,000 that alone equals 0.13 percent, almost nine times the measured price gap.

Faster networks help only to a limited extent. Stablecoins or coins with short block times can be moved in seconds to minutes, but the price gaps there close just as quickly, because automated traders use precisely these routes.

Triangular arbitrage, funding rates and DEXs: other forms of crypto arbitrage

With triangular arbitrage you stay on a single exchange and trade in sequence across three pairs, for example euros into bitcoin, bitcoin into ether and ether back into euros. If the three prices do not line up exactly, you end up with more euros than you started with. Because each of the three trades incurs a fee, the advantage shrinks quickly here as well, and the deviations usually last only fractions of a second.

Funding rate arbitrage, also known as cash-and-carry, exploits the difference between the spot market and perpetual futures, that is, futures contracts with no expiry date. The funding rate is a payment that buyers and sellers of such contracts exchange at regular intervals to keep the contract price close to the spot price. Anyone who buys bitcoin and simultaneously sells the same amount through a perpetual contract is hedged against price moves and collects the funding payment as long as it is positive. The risk lies in the detail: the rate can turn negative, the short position can be liquidated in a price spike, and the capital is split across two platforms.

On decentralised exchanges, known as DEXs, arbitrage is almost entirely in the hands of automated programs. These programs monitor the prices of liquidity pools and close deviations from centralised exchanges within the same block. Part of these earnings falls under MEV (Maximal Extractable Value), the value that block producers and specialist traders can capture through the ordering of transactions.

Crypto arbitrage bots and high-frequency traders: who actually closes the gaps

That the gaps on an ordinary evening sit at around a hundredth of a percent is the work of professional traders. These firms hold balances on dozens of exchanges, pay only a fraction of a retail customer's fees thanks to high volumes, and let programs trade at intervals of milliseconds. Their servers often sit in the same data centres as the exchanges themselves. A person with an app cannot compete against that.

Even a bot of your own changes little as long as it trades at retail fee levels. If you want to explore automated trading, test the tools mainly for strategies that do not depend on speed. Data sources for order books, funding rates and exchange comparisons are brought together in our comparison of analysis platforms.

Be wary of providers that advertise fixed returns from "arbitrage" and collect money for it. There is no guaranteed return in this business, and Germany's financial regulator BaFin regularly warns against unlicensed providers promising crypto returns. Before every deposit, check whether a provider holds the necessary licence.

Crypto arbitrage risks: withdrawal freezes, slippage and tied-up capital

The biggest risk lies with the exchange itself. A price gap often opens precisely when an exchange has technical problems or pauses deposits and withdrawals for a coin. The price difference then looks tempting but cannot be closed, because the coins cannot be transferred. Anyone who buys at that moment is stuck with the position.

Further risks include slippage on larger amounts, price moves during the transfer and counterparty risk: if you park balances on several exchanges so you can trade quickly, you depend on the solvency of each one. There is also the tied-up capital, since the money is spread around and cannot be invested elsewhere at the same time.

With small coins and thin order books, the gaps often look large on screen. In practice they vanish as soon as you buy, because even a small order moves the price.

Tax on crypto arbitrage profits: holding period, exemption limit and commercial trading

For private investors in Germany, Section 23 of the Income Tax Act currently applies. Because buying and selling in arbitrage happen within minutes, the one-year holding period is never reached. Every profit counts as a private disposal transaction and is taxed at your personal rate, provided your gains from such transactions reach the annual exemption limit of €1,000. Losses from such transactions can only be offset against gains of the same kind.

One point matters for the allocation: when you sell on exchange B, what counts is the purchase price of the coins you sell there. If you hold an older position there and replenish it with newly bought coins on exchange A, the calculation can look different from what you expect. Anyone who makes a very large number of trades in a short time also risks the tax office examining whether the activity amounts to commercial trading. If your volume is significant, seek tax advice.

Crypto arbitrage only leaves something over once the price gap tops one percent

Our measurement shows that on a normal evening, price gaps between large euro exchanges are below two hundredths of a percent, while a retail customer's fees exceed one percent. If you still want to explore arbitrage, three steps will help:

1. Compare fees: Factor each exchange's taker and maker rates and its withdrawal fee into your threshold before you treat a price difference as an opportunity. Our comparison of crypto exchanges sets out the terms side by side.
2. Consider automation: If you want to trade regularly, you need software. Our comparison of crypto trading bots shows which providers connect to which exchanges and what they cost.
3. Document every transaction: Arbitrage generates many small taxable trades. The tools in our comparison of crypto tax tools import data from multiple exchanges and add up gains and losses.

(As of November 5, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)