[SPONSORED] The arbitrage premium has bounced back to life. Moneyweb crypto
Those involved in crypto arbitrage will have noticed that premiums have jumped 100% in recent months, the result of a drop in volumes prompted by third-party payment company Circle’s decision to stop accepting payments for arbitrage trades.
Crypto arbitrage involves buying cryptos abroad and selling them in SA, where they traditionally trade at a premium due to exchange controls. “In March, most of our competition was forced to suspend trading when Circle’s third party payment gateway was switched off,” says Andrew Ludwig, co-founder of CURRENCY HUB.
South Africans can participate in crypto arbitrage using their R1 million a year Special Investment Allowance, and for those with tax clearance, their R10 million a year Foreign Investment Allowance. The minimum capital required ranges between R100 000 and R200 000. “We long ago saw the need for regulation, which is why we obtained all the required FSP licences, even before this was a requirement,” says Ludwig.With fewer crypto arbitrage service providers, the premium has increased to around 2.5% when trading via crypto exchanges , and around 1.5% on over-the-counter markets.
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