The market for bitcoin and altcoins has a features that other markets rarely present: the difference in the quotation of the same asset in different exchanges – companies of buying and selling of cryptocurrencies. Thus, there is an opportunity to arbitrate over these differences and obtain uncorrelated returns to the digital asset market.
Broadly speaking, this is the strategy of the TSAG Conservative, one of the resource allocation alternatives offered by Transfero Swiss AG (TSAG) to the market.
How it works
To achieve return through price asymmetries between the exchanges, the TSAG Conservative maintains cash and bitcoins resources in buy and sell exchanges from different countries. When an asymmetry between prices is identified, a purchase or sale of BTCs is performed.
These arbitrations can be identified either by an algorithm – in exchanges prepared for this – when by an operator of the Swiss firm. In this case, he gives a purchase and sale order, according to the window of opportunity identified.
For example, if in one exchange the BTC is being sold for $ 15,000 and in another, the $ 15,500, the company will buy BTC where the lowest price is and sell at the highest price. This difference – in this case, US$ 128 – is the investor’s profitability. From time to time, there is a rebalancing of resources between the exchanges.
“In other markets, you have the big banks doing this arbitrage, so there are not so many opportunities. In the crypto market, the banks have not yet entered, so the possibilities of using this strategy are greater “, says the Director of Investments of TSAG, Carlos Russo.
Partnerships in several countries
In order to operate in this way, TSAG maintains proprietary operating tables and in partnership with exchanges from different countries. According to Russo, besides the lack of big banks doing arbitrage, there are countries that tend to use more or fewer bitcoins as intermediaries for international remittance or reception. Thus, more closed countries tend to have a greater price detachment. Mature markets tend to be priced closer to the norm.
Unlike TSAG Advanced, which seeks valuation in crypto, the Conservative seeks fiat money return. The minimum ticket, however, is higher, of US$ 38.3 thousand. There is no administration fee and a performance fee of 20% is charged. Transfero also negotiates partnerships to reduce the minimum ticket and cover a larger portion of the market.
To learn more about the TSAG Conservative, fill out the registration form on the website of Transfero Swiss AG, which one of the company analysts will contact.
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