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conditions and privacy policy Sign Up Please enter a valid email address TV Videos Podcasts Research Events Trending Ethereum Market Wrap: Ethereum Keeps Burning and Price Is Hot Bradley KeounFrances YueAug 13, 2021 Cardano Cardano Jumps on Signals Smart Contracts Coming Next Month Frances YueAug 13, 2021 Polygon Polygon Merges With Hermez Network in $250M Deal Cheyenne LigonAug 13, 2021 POS Ethereum Miners Make Multimillion-Dollar Bet on Upgrade Delay David PanAug 12, 2021 Prices Bitcoin Shows Signs of Exhaustion as Rally ‘Falters’ Before Next Leg Up: Sources Sebastian SinclairAug 12, 2021 Bitcoin 24h $46,435.40 -0.40% Bitcoin 24h $46,435.40 -186.23 -0.40% Ethereum 24h $3,232.58 -0.20% Ethereum 24h $3,232.58 -6.62 -0.20% XRP 24h $1.15 +11.22% XRP 24h $1.15 +0.115940 +11.22% Cardano 24h $2.15 +5.79% Cardano 24h $2.15 +0.117854 +5.79% Stellar 24h $0.360367 +1.13% Stellar 24h $0.360367 +0.004022 +1.13% Dogecoin 24h $0.281433 +0.87% Dogecoin 24h $0.281433 +0.002424 +0.87% Uniswap 24h 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in Minutes Slinging Stablecoins Schematic of Aug. 10 stablecoin arbitrage trade using DeFi. (Etherscan, CoinDesk) Daniel Cawrey Sebastian Sinclair Aug 12, 2020 at 12:19 p.m. UTCUpdated Aug 12, 2020 at 2:52 p.m. UTC First Mover: How a DeFi Trader Made an 89% Profit in Minutes Slinging Stablecoins In digital-asset markets, stablecoins like tether and USDC are supposed to represent $1 of value. But their prices often fluctuate on the pubescent trading platforms of decentralized finance, or DeFi.  So cryptocurrency traders are now apparently devising strategies to profit from slinging stablecoins in these fast-growing but often janky and thinly traded markets. You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.  Subscribe to , Subscribe By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy. In one Aug. 10 transaction on the Ethereum blockchain, a trader appears to have used a series of transactions in tether and USDC on the decentralized cryptocurrency exchanges Uniswap, Curve and dYdX to net a tidy $40,000 profit off a $45,000 initial investment. That works out to an 89% gain in what was likely a matter of minutes.  The whole transaction can be seen on the website Etherscan, used to access data recorded on the Ethereum blockchain. Here’s that looks like: Screen grab of transactions used in Aug. 10 stablecoin arbitrage trade. Source: Etherscan What happened was this: 1) Trader started with roughly $45,000 in USDC tokens and borrowed another $405,000 on dYdX, for a total of $450,000 in USDC.  2) Exploiting temporary differences between the stablecoins’ face value of $1 and quoted prices, the trader was able to use Uniswap to exchange the $450,000 of USDC for $492,000 of USDT.  3) Trader swapped $492,000 of USDT for $492,000 of USDC on Curve.  4) Trader paid off the $405,000 loan from dYdX and had $87,000 USDC remaining.  5) The transactions cost about $2,000 in fees.  6) Trader netted $40,000 profit on $45,000 of initial capital. Schematic of Aug. 10 stablecoin arbitrage trade using DeFi. Source: Etherscan, CoinDesk The transaction drew eyeballs on Tuesday from flabbergasted (and perhaps admiring) Twitter users. At first glance, the strategy appears similar to prior exploits of these largely untested DeFi systems, such as in June when a hacker drained $500,000 from the liquidity provider Balancer.  But this week’s operation appears legal, merely a 2020 version of a classic arbitrage strategy used across Wall Street and cryptocurrency markets every day. Not bad for a few minutes of work. But just imagine how long it took for someone to figure this out.  Tweet of the day Bitcoin watch Source: TradingView BTC: Price: $11,462 (BPI) | 24-Hr High: $11,771 | 24-Hr Low: $11,138 Trend: Bitcoin’s bullish long-term trend looks to be on a summer holiday this week, with prices generally languishing well beneath the psychological price level of $12,000. Tuesday’s 7.3% rejection from around $12,000 to a low of $11,137 hints at further downside risk on larger time frames backed by decreasing levels of weekly trade volume. Bitcoin’s weekly chart reveals the possibility of a sell-off for September – historically a bearish month for the world’s largest cryptocurrency by market cap. For example, based on data from the last three years, bitcoin has experienced losses between 20% and 36% in September after a peak in August.  The recent rejection at overbought levels near 70.00 on the relative strength index (RSI), a tool used by traders to judge market exuberance, could lead to a deeper pullback. Immediate support stands at the former resistance level near $10,500 with long-term support hanging at $8,650 along the 50-period moving average on the weekly chart. A short-term push by opportunistic buyers could drive prices to retest $12,000 once more. However, failing to cement a new yearly high could result in a longer-term pullback as bitcoin heads into its historically poor month. Sign up to receive First Mover in your inbox, every weekday. Read more about... ArbitrageMarketsStablecoinsUSDCNewslettersFirst Mover DisclosureThe leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Related Crypto Trading What Does Liquidation Mean and How to Avoid It? Andrey SergeenkovAug 13, 2021 Ethereum Market Wrap: Ethereum Keeps Burning and Price Is Hot Bradley KeounFrances YueAug 13, 2021 Cardano Cardano Jumps on Signals Smart Contracts Coming Next Month Frances YueAug 13, 2021 Ponzi Schemes Founder of Alleged $95M Ponzi Nabbed in Russia, 3 More Sought Anna BaydakovaAug 13, 2021 Bitcoin Bitcoin Back Above $46K on Low Daily Volume as Altcoins Outperform Sebastian SinclairAug 13, 2021 What is undefined? 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