Comparison of Crypto Arbitrage Investments
Below is a comparison of a few of the most trusted companies offering crypto arbitrage services in South Africa:
⠀⠀ ⠀ | ⠀⠀ | Key features: Minimum investment = R50,000 / Capital is guaranteed / Fee = 1% per trade | Go to OVEX website |
⠀ ⠀ | ⠀⠀ | Key features: Minimum investment = R200,000 / Capital is guaranteed / Fee = 25% of profits generated | Go to VALR website |
⠀  ⠀ | ⠀⠀ | Key features: Minimum investment = R250,000 / Fee = 0.5% – 1% per trade depending on the premium | Go to website |
There are subtle differences in the way in which each of these companies charge for their arbitrage service, and it is not always clear which is the cheaper option. To help illustrate this, we have created the chart and tables below which compares a typical investment through OVEX and VALR.
Expected returns of a R250,000 investment:
As you can see, Ovex’s charging structure would usually only provide better returns for customers only if the spread exceeds 4% when compared to VALR. Read below to understand exactly which company is best in different scenarios.
(and then come back to this article to compare providers)
What is Crypto Arbitrage?
When people talk about an arbitrage trade, what they mean is simultaneous buying and selling an asset in different markets to take advantage of differing prices for the same asset.
Therefore, a crypto arbitrage is simply doing this with crypto currencies – and most commonly with Bitcoin.
Why does this arbitrage exist and how it works?
Due to the South African exchange controls, there is often a higher demand for Bitcoin relative to its supply in South Africa compared to other overseas markets. When this happens it causes Bitcoin to trade at a higher price locally and it is therefore possible to buy Bitcoin overseas and sell it in South Africa for a profit. The difference in the price of Bitcoin in South Africa vs other places around the world is referred to as the “spread” or “premium”. In the past few years the average spread has been around 4%.
The trick to getting the most out of these arbitrage opportunities boils down to how efficiently you are able to move money between currencies, countries and crypto exchanges. In a nutshell the arbitrage involves the following trades:
- Step 1: Use Rands to buy USD
- Step 2: Send the USD to overseas country where Bitcoin will be purchased
- Step 3: Use an overseas crypto exchange to buy Bitcoin
- Step 4: Send purchased Bitcoin to a South African exchange through the blockchain.
- Step 5: Sell the Bitcoin for Rands on the South African exchange.
If you can perform all the above trades at a cheaper cost than the available spread, then you have made a profit on the arbitrage trade.
There are several companies in South Africa that have created a Bitcoin arbitrage product that is available to South Africans to invest through. These companies have put in place structures which allows them to minimise the costs of the above trades.
How much do you want to invest? Read below to compare OVEX and VALR returns at different investment amounts
Suppose you have R200,000 and your entire SDA allowance of R1m available to invest in the Bitcoin Arbitrage. The table below compares your expected profits with Ovex and VALR, after all fees, for differing levels of spread or premium levels.
| Premium level | Ovex | VALR |
| 1.5% | R 2 500 | R 8 750 |
| 2.0% | R 7 500 | R 12 500 |
| 2.5% | R 12 500 | R 16 250 |
| 3.0% | R 17 500 | R 20 000 |
| 3.5% | R 22 500 | R 23 750 |
| 4.0% | R 27 500 | R 27 500 |
| 4.5% | R 32 500 | R 31 250 |
| 5.0% | R 37 500 | R 35 000 |
| 5.5% | R 42 500 | R 38 750 |
| 6.0% | R 47 500 | R 42 500 |
| 6.5% | R 52 500 | R 46 250 |
Suppose you have R250,000 and your entire SDA allowance of R1m available to invest in the Bitcoin Arbitrage. The table below compares your expected profits with Ovex and VALR, after all fees, for differing levels of spread or premium levels:
| Premium level | Ovex | VALR |
| 1.5% | R 3 000 | R 9 250 |
| 2.0% | R 8 000 | R 13 000 |
| 2.5% | R 13 000 | R 16 750 |
| 3.0% | R 18 000 | R 20 500 |
| 3.5% | R 23 000 | R 24 250 |
| 4.0% | R 28 000 | R 28 000 |
| 4.5% | R 33 000 | R 31 750 |
| 5.0% | R 38 000 | R 35 500 |
| 5.5% | R 43 000 | R 39 250 |
| 6.0% | R 48 000 | R 43 000 |
| 6.5% | R 53 000 | R 46 750 |
As you can see, Ovex’s charging structure would usually only provide better returns for customers only if the spread exceeds 4% when compared to VALR.
Suppose you have R333,333 and your entire SDA allowance of R1m available to invest in the Bitcoin Arbitrage. The table below compares your expected profits with Ovex and VALR, after all fees, for differing levels of spread or premium levels:
| Premium level | Ovex | VALR |
| 1.5% | R 3 500 | R 9 750 |
| 2.0% | R 8 500 | R 13 500 |
| 2.5% | R 13 500 | R 17 250 |
| 3.0% | R 18 500 | R 21 000 |
| 3.5% | R 23 500 | R 24 750 |
| 4.0% | R 28 500 | R 28 500 |
| 4.5% | R 33 500 | R 32 250 |
| 5.0% | R 38 500 | R 36 000 |
| 5.5% | R 43 500 | R 39 750 |
| 6.0% | R 48 500 | R 43 500 |
| 6.5% | R 53 500 | R 47 250 |
Suppose you have R500,000 and your entire SDA allowance of R1m available to invest in the Bitcoin Arbitrage. The table below compares your expected profits with Ovex and VALR, after all fees, for differing levels of spread or premium levels:
| Premium level | Ovex | VALR |
| 1.5% | R 4 000 | R 10 250 |
| 2.0% | R 9 000 | R 14 000 |
| 2.5% | R 14 000 | R 17 750 |
| 3.0% | R 19 000 | R 21 500 |
| 3.5% | R 24 000 | R 25 250 |
| 4.0% | R 29 000 | R 29 000 |
| 4.5% | R 34 000 | R 32 750 |
| 5.0% | R 39 000 | R 36 500 |
| 5.5% | R 44 000 | R 40 250 |
| 6.0% | R 49 000 | R 44 000 |
| 6.5% | R 54 000 | R 47 750 |
Suppose you have R1m and your entire SDA allowance of R1m available to invest in the Bitcoin Arbitrage. The table below compares your expected profits with Ovex and VALR, after all fees, for differing levels of spread or premium levels:
| Premium level | Ovex | VALR |
| 1.5% | R 4 500 | R 10 750 |
| 2.0% | R 9 500 | R 14 500 |
| 2.5% | R 14 500 | R 18 250 |
| 3.0% | R 19 500 | R 22 000 |
| 3.5% | R 24 500 | R 25 750 |
| 4.0% | R 29 500 | R 29 500 |
| 4.5% | R 34 500 | R 33 250 |
| 5.0% | R 39 500 | R 37 000 |
| 5.5% | R 44 500 | R 40 750 |
| 6.0% | R 49 500 | R 44 500 |
| 6.5% | R 54 500 | R 48 250 |