- A crypto trader recently capitalized on an XRP arbitrage opportunity that offered a 45% discount.
- There was a 45% difference between XRP/USD and XRP/USDT pairs for less than 20 mins.
- By materializing the price discrepancy on Bybit, the trader managed to net seven figures.
A crypto trader who goes by DeFiSquared on X (formerly Twitter) recently materialized on an arbitrage opportunity that occurred on Bybit. The arbitrage reportedly allowed the crypto trader to net as much as seven figures through multiple crypto trades on the exchange.
DeFiSquared took to Twitter earlier today to share his seven-figure trade. According to the trader, the arbitrage opportunity presented itself after an obscure derivatives de-peg occurred between coin margin and Tether USD (USDT) on Bybit. There was a mismatch between the price of XRP pairs on Bybit and other centralized crypto exchanges.
For reference, crypto arbitrage refers to a trading strategy of exploiting price differences in cryptocurrencies. A trader who employs the arbitrage strategy will typically buy and sell the same asset across different marketplaces and profit from the difference in the asset’s price.
DeFiSquared told their followers that the arbitrage opportunity occurred between the XRP/USD and XRP/USDT contracts on Bybit. The price discrepancies between these trading pairs led to a discount of 45%, which reportedly lasted for about 10-20 minutes. The crypto trader capitalized on the arbitrage opportunity to net 7 seven figures, which could be anywhere between $1 million to $9.9 million.
The crypto trader speculated that the discrepancy was caused by algorithmic market makers running out of spot XRP needed for coin-margined contracts on the exchange amid the significant liquidations that occurred over the past 24 hours.
Data from CoinGlass shows that XRP traders on centralized exchanges witnessed liquidations of more than $27 million over the past 24 hours. Meanwhile, the liquidations for the broader crypto market exceeded $1 billion. The open interest on XRP perpetual contracts on Bybit declined by over 47% over the past 24 hours.
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