Several crypto arbitrage providers in SA paused arbitrage services this week after clients started cutting ties with crypto-enabled Silvergate Bank, in the lead up to news that it has filed for voluntary liquidation in the US this week. There’s some good news in this: the crypto arbitrage premium jumped to 2.4% at one point this week – a more than three-fold leap in premiums compared with two weeks ago – as an estimated R1 billion a month in crypto arbitrage trades were cancelled.
” Says David Farelo, co-founder of Currency Hub: ”We were not using Circle as a part of our arbitrage service so we have not been affected by Silvergate’s well-publicised issues. For us, it’s pretty much business as usual. In fact the increase in the arbitrage premium over the last week or so has been an excellent time to make profits.” Circle is the issuer of USDC, a digital dollar known as a stablecoin and the fifth largest crypto with a market cap of $43.5 billion.