Some Moneyweb readers seemed astonished by the claim that one can make (virtually) risk-free profits of up to 6% a week by arbitraging crypto assets such as Trust Token.
At Moneyweb Crypto, we’ve repeatedly warned about crypto scams promising unrealistic claims.
Arbitrage is not one of those scams – it’s done successfully by thousands of South Africans every day.
Arbitrage is the exploiting of price differences in the same asset on different markets. For example, last week you buy bitcoin at the equivalent of R250 000 on overseas crypto exchange Kraken, and then sell it an hour or two later on a South African exchange for R260 000 – a price difference of 4%.
The risk you run in doing this is that the bitcoin price drops between the time you purchased it at Kraken and sold it in SA.
This is where SA-based crypto company Ovex decided to eliminate the risk of price moves eating away at your arbitrage profit while waiting for the bitcoin to arrive in SA – which can take several hours.
Ovex settled on a different crypto – Trust USD (TUSD) – which is a ‘stable coin’ fully backed by actual US dollars. The Trust Token is purchased offshore and immediately sold in SA at a premium that has been as high as 5% in recent weeks, and even reached 8% earlier in the year.
Ovex takes care of all the logistics of buying and selling.
Trust Token, the company that issues TUSD, is a San Francisco-based stable coin platform with a