Automated Crypto Trading

Automated Crypto Trading




Chainvest is a Fintech startup aiming to detect and exploit profit oppurtunities of the cryptocurrency market. The basis of the idea is focused on the imbalance in the price of cryptocurrencies between multiple exchanges. This is known as Arbitrage.


As a team we started out mining Ethereum and used the payment tokens to do some cross – market arbitrage of the same asset – pair. We figured out that it has great potential and profits with low risks even when performed by humans – who lack of speed when it comes to making quick transactions. So as a team we moved on automating this techinque by building our software and in the same time focus on minimizing the risks of failure involved, with a goal of eliminating them completely.


Arbitrage trading is a widely used technique in the stock market and is becoming more and more popular on the cryptocurrency market as well. The market’s volatility along with the fact that the cryptocurrency assets are being traded in more than 200 exchanges where the price is localy configured from the asks/bids make it a great oppurtunity for arbitrage seekers.


Our short term goals are based on creating an automated software that communicates with the exchanges we consider secure and perform analysis on the prices of the underlying pairs we want to invest. In the same time we are building a data base with data from the above pairs (I.e order book, asks/bids, kandlesticks) so that we can perform analysis on predicting the maker market as it is more profitable. In the long run our software will perform automated transactions based on simple low risk algorithms that involve both the spot and the derivatives market.


The first part of our product was to establish solid websocket connections with the markets we want to trade in and keeping the data we receive in our database. The data we receive for each observed cryptocurrency pair is the order book (it contains all the open orders for asks and bids), the kandlestick and the ticker of price. For our Minimum Viable Product – MVP we are focusing on 4 exchanges on the spot market and some pairs on the future’s market. Furthermore, for our MVP we are focusing mostly on Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) and Ripple (XRP) due it’s volume of trade but will also include every other cryptucurrency pairs that are listed in order to explore every arbitrage oppurtunity. The technology we use for websocket connection is Javascript and Node.js and for our database we are using MongoDB. Our short term goals for our MVP also include building a fully automated algorithmic trading program based on C++ that exploits arbitrage oppurtunities by acting as a taker (a trader is considered a taker when he fullfills one of the existing orders on the order book).
In the same time we want to start analyzing the maker market (a trader is a maker when he opens new positions in the order book). Makers have smaller transaction fees from exchanges as they offer liquidity, so the profit from arbitrage is higher when acting as a maker. However, in order to automate the maker market and keep our strategies low risk we must first conduct an analysis on which amounts of orders and at what price will be covered and how much time it will take them to be covered. So in parallel to our automated bot for takers we want to perform an analysis on the above. In the long run, we aim to introduce more exchanges and pairs from the derivatives market in our trading robot and possibly expand on other assets apart from cryptocurrencies. In addition, having built a big database with precise data that track the market down to every transaction we aim to develop new trading techniques and find patterns that can be exploited. The unique value of our overall product will be that our automated trading robots will be used to produce passive income with almost zero risk. Finally, the scalability of our software will enable easy customizations for our clients’ needs based on the assets and the exchanges they want to be involved in.