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Cross Currency / Triangular Arbitrage: XRPEUR, XRPBTC, BTCEUR (EURBTC)

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by COINS NEWS 90 Views

TLDR; Can't get my head around cross currency / triangular arbitrage trading. Entry from current financial situation and price pair inverse are the problem.

hi,

for a long time I always wanted to do cross currency trading, but never did, now I want to try. For my personal research project I chose XRP/BTC/EUR. but i sstruggle with entering the market. I am having some XRP (I bought with USDT) and I have EUR, but currently no BTC.

  • XRPBTC was very weak over the last year. Would be a good idea to buy XRP with BTC, which I don't own at the moment
  • BTCEUR was very strong over the last year. I need BTC and I have EUR, but I would be at a high price.
  • XRPEUR gained a bit, and is stronger than XRPBTC. I have XRP but bought in USDT, can't tell at the moment if I made profit in my base currency. Probably yes, iirc I sold EUR for USDT at around 1.08.

Summary:

  • BTC very strong over XRP, strong over EUR
  • XRP very weak over BTC, strong over EUR
  • EUR weak over XRP, very weak over BTC

I can get my head clear and decide what to do. Options I have are, since I only own EUR and XRP at the moment:

1) Buy XRP for EUR 2) Buy BTC for EUR 3) Buy EUR for XRP 4) Buy BTC for XRP

So what would happen? Signal I just assume (scenarios):

1) probably a slight profit over a period of time. Maybe not. Let's say I am undecided. 2) Actually I think BTC will drop significantly, I'd made a huge loss if I buy now 3) Instant profit (XRP made some profits over USDT and USDT over EUR). I'd have more EUR, still no BTC 4) Similar to 2). I assume XRP will get stronger over BTC, as BTC gets weaker overall. I'd made a future loss.

The best would be if I had like 300€, of which I already have 100 in XRP and 100 in BTC, I could just shift every day, like 10 to whatever made some profit that day.

Secondly, I am actually not really sure what do do then. Would I just shift like just said my positions each x period, what ever made a profit or would I seek an exit to my base currency. Because, let's say Crypto gains some real demand outside the trading space, and I could actually do something with XRP and BTC. I'd say it would make sense to try to improve my XRP and BTC positions rather than to try to add to my fiat base currency, which is the opposite of what I am doing now, mentally, as it's always the same, buy low sell high.

base (pair) base strength order remarks
EUR (BTC) strong sell EUR for BTC same as 4)
EUR (BTC) weak buy EUR for BTC same as 3)
BTC (EUR) strong sell BTC for EUR same as 2)
BTC (EUR) weak buy BTC for EUR same as 1)

any advice or training resources?

submitted by /u/crypto_dood
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