Arbitrage is the practice of profiting from price differences of the same asset across different markets — simultaneously buying low and selling high.
When Bitcoin 2026trades at $68,400 on Binance but $68,750 on Bybit — that $350 gap is an opportunity. An arbitrageur buys on the cheaper exchange and simultaneously sells on the expensive one, locking in profit before the gap closes.
Futures arbitrage adds another layer: the difference between a coin's spot price and its futures contract price — called the "basis." This basis is predictable, measurable, and exploitable.
The key insight: you don't need to predict where the market goes. You only need a price gap to exist — and you profit when it closes.
Buy on spot market, short the futures contract. When both prices converge at expiry, you collect the spread as profit — regardless of market direction.
Same asset, two exchanges, different prices. Detect the gap, execute both legs simultaneously, close for guaranteed spread profit.
Perpetual futures pay or charge funding every 8 hours. When funding is high, hold spot and short the perp — collect funding as passive income.