Let's look at an example: Packet of NikNaks in South Africa = R15 Packet of NikNaks in US = $1 = R18
How to arb? Buy cheap, sell expensive.
Easy as that. In this example: Buy in SA at R15 (the cheaper market) and sell in the US at R18 (the more expensive market), and you'll make a profit of R3 per packet of chips.
How do we do it?
While buying and selling NikNaks sounds like something I'd genuinely want to do for a living, there is a faster, cheaper and more scalable way to do it: crypto.
First, bitcoin in the US is slightly cheaper than it is in SA.
There are a few reasons for this (story for another day), but the point is that there is a slight price difference that can be exploited. Here's how we do it:
1. Exchange rands for dollars at a local bank (eg Capitec);
2. Send dollars to a US crypto exchange (eg Coinbase);
3. Buy bitcoin with dollars;
4. Send bitcoin to an SA exchange (eg Luno); and
5. Sell bitcoin for rands.
= PROFIT
And then? Repeat. Over and over again.
This story is from the November 19, 2024 edition of The Citizen.
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This story is from the November 19, 2024 edition of The Citizen.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
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