 |
In the world of digital assets, prices move faster than headlines, yet not always in the same direction everywhere. For Henry Kershaw, Senior Strategy Analyst at BridgemontEquity.com this mismatch is not chaos. It is opportunity!
Kershaw believes one of the most overlooked drivers of crypto pricing is regulatory variability. Countries with different rules, exchange restrictions, compliance systems, or trading limits often trade the same asset at different prices. In traditional markets, this gap would disappear quickly. In crypto, it still lingers and smart investors are acting on it.
“People assume price differences are errors,” Kershaw says. “But they’re signals. They show where one market is constrained and another is moving freely. That is where arbitrage becomes possible.”
Crypto is one of the only global markets that trades continuously yet remains fragmented by geography. Taxes differ. Trading limits differ. Banking access differs. Some nations encourage digital asset adoption. Others limit it. The result is a market where the same coin may be cheaper in one country and more expensive in another, not because of demand, but because of regulation.
For example, in regions where crypto is harder to convert back into cash, prices may run higher due to restricted liquidity. In areas with strict onboarding rules, fewer participants can access the market, pushing prices down. These forces exist outside the blockchain itself. They live in laws, not code.
Arbitrage is not about predicting market direction, it is about capturing price contrast. When Bitcoin trades at a premium in one country and a discount in another, an arbitrage trader can buy low in one jurisdiction and sell high in another, often within minutes.
Kershaw explains that institutional players have already noticed. Some hedge funds and proprietary traders build entire strategies around border crossing pricing gaps. But individual investors can benefit too, especially those who understand where regulation creates friction, rather than clarity.
Bridgemont Equity tracks the spread between global Bitcoin prices and finds that periods of regulatory change often create new arbitrage windows. When Japan adjusts compliance rules, Singapore tightens capital flows, or Canada updates exchange frameworks, price dispersion follows.
Kershaw notes that this is especially true during periods of market stress. When volatility spikes, capital controls slow the flow of crypto from one region to another. Prices decouple. That is not inefficiency, it is segmentation.
Arbitrage is not without risk. If regulation changes in the middle of the trade, if capital movement is delayed, or if liquidity dries up, the window can close before a trader exits. Successful participants rely on timing, speed, and reliable execution channels. That is why this strategy is considered advanced rather than casual.
Still, Kershaw sees it becoming more common as crypto infrastructure improves. More exchanges. Faster settlement. More institutional gateways. All allow traders to operate across markets with greater confidence.
Regulatory variability will not disappear soon. Governments are moving at different speeds, with different priorities, and often with conflicting interpretations of digital assets. That inconsistency can frustrate investors, but it also creates a unique form of value extraction that does not exist in more synchronized financial systems.
Kershaw views this as part of crypto’s maturation curve. “Eventually, regulation will standardize,” he says. “But until then, price differences are a feature, not a flaw. Arbitrage rewards those who understand the landscape, not just the technology.”
Disclaimer: This article is purely informational and doesn't offer trading or financial advice. Its content is not intended to be investment advice. We do not guarantee the validity of the information, especially when it pertains to third-party references or hyperlinks.
Copyright (c) 2025 TheNewswire - All rights reserved.
