The Arbitrage Strategy for Cryptocurrency: Principle and Feasibility Based on Blockchain Technology

Cryptocurrency is a tradable digital asset or digital form of money based on blockchain technology, which uses encryption to authenticate and protect transactions. Contemporarily, there are over a thousand different types of cryptocurrencies in the world, which is treated as the key to a fairer future economy. This research will illustrate the principles and process of arbitrage strategy for cryptocurrency. Specifically, the arbitrage possibilities by comparing and calculating the coefficient of relationships between prices and events will be investigated based on previous data. Primarily the original idea and the developments of cryptocurrency will be introduced, from the BTC to the thousand of cryptocurrencies. Subsequently, a deep study of different principles is carried out to find the possibilities of arbitrage and verify their feasibility. Once more cryptocurrencies occurred, meaning the risk and arbitrage chances will happen more often than before. The future study will focus more on the safe arbitrage possibilities between different countries. These results offer a guideline for a safer arbitrage possibility when the price change is related to the regulatory actions.