The crypto market has seen a big drop in the past few months. Due to this, investors have lost millions of dollars on one hand and at the same time traders have also got an opportunity to make profit from Abitrage. Some traders are trying to profit from the price difference between Ether, the second largest cryptocurrency by market capitalization, and a version of it.
Stacked on the Ethereum blockchain, the big holders of this Ether-linked version of stETH include the troubled crypto lending firm Celsius Network and hedge fund Three Arrows Capital. stETH was launched by the decentralized app Lido Finance about two years ago and has since DeFi But has become a popular collateral asset for lending and borrowing. However, due to the fall in the crypto market affecting the liquidity and increasing its discount against the price of Ether, the market people have also become cautious about it.
Crypto data firm Kaiko says Celsius Network’s decision to stop trading on its lending platform has also affected stETH. Apart from this, selling a large part of its holding of this token by Three Arrows Capital has also led to a drop in its price. However, despite this, many traders have increased their positions in stETH.
Despite the decline in the crypto market in recent months traders A section of the company is making profits even in this period of decline. This class belongs to hedge funds such as arbitrageurs, which seek to profit from price differences between different countries and exchanges. “We were in a 0.40 percent gain when the market took a big fall in May,” said Anatoly Crachilov, co-founder and CEO of UK-based Nickel Digital Asset Management. Abitrage trading involves buying an asset at a lower price at one place and selling it at a higher price at another place. In this, the benefit of difference in price is taken without any change in the quantity of the asset. This method of trading is definitely not for everyone. It requires access to multiple markets and exchanges, and algorithms play a major role in this. Because of this, only firms like hedge funds can profit from it.