SmartBitrage

SmartBitrage is an automated cryptocurrency arbitrage system I designed and built. It monitors price differences across multiple exchanges in real-time and executes trades to capture arbitrage opportunities.

What is Arbitrage?

Cryptocurrency arbitrage exploits the same asset trading at different prices on different exchanges simultaneously. Buy low on Exchange A, sell high on Exchange B — the profit is the spread minus transaction fees. In practice, windows are small (seconds to minutes) and require automated execution to be profitable.

System Architecture

The system is composed of three main layers:

Market Data Layer

• Connects to multiple cryptocurrency exchanges via REST APIs and WebSockets
• Normalizes order book data into a unified format
• Maintains a real-time view of prices, spreads, and available liquidity

Opportunity Detection Engine

• Continuously scans for profitable arbitrage paths
• Factors in trading fees, transfer costs, and minimum profit thresholds
• Detects both two-leg (A→B) and triangular arbitrage opportunities

Execution Layer

• Places orders on both sides of the arbitrage simultaneously
• Manages partial fills, order cancellation, and risk limits
• Logs all trades with full audit trail

Key Technical Decisions

Concurrency: The system handles thousands of price updates per second. Using async I/O throughout the data pipeline was essential to keep up with market data feeds.

Risk Management: Hard limits on position size, maximum loss per session, and circuit breakers to halt trading during anomalous market conditions.

Reliability: The system monitors its own health and can restart gracefully after failures without leaving open positions.

Results

The system successfully identified and captured arbitrage opportunities across major cryptocurrency exchanges, validating the core algorithm through live trading.