arbX – AAF, AOF & ACF Arbitrage, Trading & Investing Cryptocurrency?
arbX is a digital currency fund that promises to make money for investors through arbitrage and OTC trading. Read our arbX review to learn more.
What Is arbX?
arbX is a series of investment funds that use cryptocurrencies. The company mainly makes money through arbitrage opportunities – they buy low on some exchanges, then sell high on other exchanges, taking advantage of the difference in prices between exchanges and currencies.
Today, arbX’s returns are a mix of about 70% arbitrage, 15% dealer supply, 10% futures trading, and 5% investments in loans and swaps.
You can participate in arbX’s funds online today through arbX.co. Overall, the company’s goal is to increase wealth through digital currency.
In July 2017, arbX suffered a technological problem that resulted in a complete loss of funds for investors. It’s unclear what the current status of the company is. However, their website makes it seem like they’re continuing as normal. At the time of the technological loss, arbX reportedly had about 100 customers.
How Does arbX Work?
arbX makes money through arbitrage, including triangular arbitrage and altcoin arbitrage.
When people hear “arbitrage” they often think of trading bitcoin between exchanges to take advantage of price differences. However, these opportunities don’t really exist anymore: bitcoin’s volume is too high to provide major arbitrage opportunities like this. Instead, arbX mainly engages in triangular arbitrage, which is where you take advantage of the price of bitcoin in different markets – say, by buying bitcoin with the USD and then selling it with the South African Rand (ZAR).
This is how the arbX Arbitrage Fund (AAF) works. In most cases, the ratio between bitcoin, the South African Rand, and the US dollar is very small because the market has balanced out the gap. However, arbX identifies opportunities on both a short-term and long-term basis. The fund tracks price differentials and earns money through arbitrage.
Meanwhile, for altcoin arbitrage, the company takes advantage of lower liquidity altcoins, or coins that don’t have the best volume on smaller exchanges. Arbitrage opportunities still exist for these currencies, and arbX identifies and capitalizes on these opportunities.
In addition to the arbX Arbitrage Fund, the company operates arbX-ST, or arbX Short Term, which is used exclusively for Over the Counter (OTC) selling.
In March 2017, arbX migrated both the arbX Arbitrage Fund and the arbX ST Fund to the BTCPOP payment platform.
What Is BTCPOP?
arbX now uses a P2P “bitcoin bank” called BTCPOP as its capital manager. You buy into the funds through BTCPOP, which describes itself as a P2P lending institution. All participation in arbX is now done through the BTCPOP currency.
BTCPOP is more than your average digital currency. The currency also claims to offer a unique P2P banking experience with instant loans, investment pools, collateral tied loans, and more.
Some of the core features of BTCPOP include:
- Secure and reliable: arbX claims that BTCPOP stores your coins in offline storage with only a small amount available via hot wallets. Obviously, as we saw in July, this doesn’t protect the company from complete loss of data when storage backup problems occur.
- Exchange: You can trade BTC, LTC, DOGE, BLK, and other altcoins through the BTCPOP exchange.
- Loans: Get P2P loans without having to deal with banks, funds, or loan sharks.
When you participate in the arbX investment funds, you get paid through BTCPOP.
Uses For BTCPOP
arbX encourages users to use BTCPOP to take advantage of P2P lending opportunities. The currency can be used for all of the following purposes:
- Loans: arbX’s BTCPOP lets users engage in reputation-based lending, where lending is based not on your credit score, but on your reputation. You can quickly get loans from other members, or make money by loaning money you control. You set the terms and amount.
- IPOs: BTCPOP lets you fund your business with an IPO. Or, users can invest in startups and IPOs through the arbX app.
- Exchange: Move your money into another currency with the BTCPOP exchange, which makes it easy to swap cryptocurrencies within the community.
- Staking: Engage in proof of stake verification, which is used by a growing number of new altcoins. You can take advantage of this to put your coins in a larger pool to capture a smaller piece of a much bigger pie.
How Much Money Can You Make?
The fund reports for March, April, and May 2017 have been published online, letting you see how well the fund has performed over the past few months.
The fund admits it had a very tough February. However, it earned 5.92% returns in March 2017, up 5.7% month over month. In April, the fund paid a dividend of 3.94% ROI after fees. In May, the company returned dividends of 4.52% ROI after fees, up 14.7% month over month.
arbX charges relatively high management fees, although they’re based on a sliding scale. The more money you invest, the greater your dividend will be, and the lower your management fee will be. Here’s the sliding scale of management fees, based on the number of tokens you hold:
- 0 to 1.2 Million Tokens: 30% management fee
- 1.2 Million to 2.4 Million: 27%
- 2.4 Million to 3.6 Million: 24.3%
- 3.6 Million to 4.8 Million: 21.87%
- Over 4.8 Million: 20%
In March 2017, the fund generated returns of 5.92%. The accounts with the lowest holdings (below 1.2 million) took home a dividend of 4.15% while paying a management fee of 30%. The accounts with over 4.8 million tokens took home a return of 4.74% and paid a management fee of 20%.
Is arbX A Scam?
In June and July 2017, arbX was frequently called a scam after the company sent a message to users explaining that it had suffered a complete loss of funds. Due to a “technological issue”, the money in all three of arbX’s accounts had disappeared.
The wallets had been centralized for the holiday weekend because the company didn’t want to hold any fiat currency over the holiday. When restoring the funds from backup, the company “made an error” that resulted in “lost coins after a drive fail and backups were not correct.”
In any case, the founder claims that he intends “to find a way to make payments until the fund is stored” and was “working on selling our IP as a way to fund this.”
The last update was in July 10. At that point, the fund had around 100 customers, although it’s unclear how many held cryptocurrency funds with the company.
Overall, arbX doesn’t appear to be a scam. However, we’ll know more once full details of the leak are released.
arbX is a cryptocurrency investment platform that operates an arbitrage fund and OTC trading fund over a P2P bitcoin bank called BTCPOP. The company made headlines in July for suffering a complete loss of funds from its investment accounts. It’s unclear what the future holds for arbX, although the company’s website is still advertising as normal.
You can learn more about arbX and their investment opportunities at arbX.co.