Research

New Report: are blockchain limitations stifling arbitrage opportunities?

New study by Copper examines to what extent slow blockchain transfer times limit arbitrage opportunities in cryptoasset markets

Copper

09.07.2020

Since 2017, crypto exchanges have surged in popularity and new ones catering to every investor type continuously crop up.

Spot exchanges have particularly taken markets by storm, adding leveraged derivatives to their suite of trading products.

Derivative digital asset-based products have presented sophisticated and institutional traders an abundance of markets, from futures and options to better hedge and access market discrepancies for profits across multiple exchanges. But global exchange growth sharing liquidity comes at a fixed cost of parking capital across numerous venues to take advantage of arbitrage opportunities.

Sluggish blockchain transfer speeds are frequently cited as the main bottleneck to blockchain adoption, and remain significantly slower than traditional technological infrastructure.

With the median transaction confirmation times currently ricocheting between 4 and a staggering 20 minutes - an important question remains for market participants; how efficient can arbitrage traders be in times of increased activity and volatility?

In this latest Copper In-Depth feature, prepared exclusively for Crypto AM’s Technically Speaking, we comb through the potential effects and missed opportunities resulting from slow blockchain transfer times.

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