Over the weekend, Tron’s native token (TRX) exhibited a premium of about 17% on Poloniex, an exchange that had recently experienced a hack. This created a potential opportunity for arbitrage trading.
Currently, the premium has reduced to approximately 7%, with TRX trading at $0.10561 on Binance and $0.11005 on Poloniex, as per exchange data.
Arbitrage trading involves purchasing an asset on one platform and simultaneously selling it for a higher price on another. Traders engaging in this practice take on some counterparty risk, ensuring that capital can be effectively transferred between both platforms.
Following a hack that resulted in over $114 million in losses last month, Poloniex temporarily suspended deposits and withdrawals. Despite this, Tron’s founder Justin Sun stated that “TRX withdrawals are open,” even though TRX is trading at a premium on Poloniex.
However, the catch in exploiting the lower TRX price on Binance and selling it at a higher value on Poloniex is that certain assets remain restricted from withdrawal on the latter. Poloniex plans to gradually resume withdrawals, starting with TRX and gradually moving to bitcoin (BTC), ether (ETH), and tether (USDT) in the upcoming weeks. Consequently, traders need to keep assets on Poloniex until they are available for withdrawal.
