Cross Exchange Latency

Cross exchange latency is the time difference between when a price movement occurs on one exchange and when it is reflected on another. This gap is the primary driver of arbitrage opportunities in the cryptocurrency market.

High latency between exchanges allows for persistent price differences, which can lead to market fragmentation and inefficient price discovery. Traders and institutions invest heavily in low-latency infrastructure to capitalize on these differences before they are corrected.

This latency is influenced by network speeds, exchange engine performance, and the geographic distribution of nodes. Understanding and measuring this latency is essential for quantitative traders and those involved in cross-exchange market making.

It is a defining feature of the fragmented nature of global digital asset markets.