A couple of years ago I made a bit of cash by arbitraging within an exchange. It had both BTC and fiat pairs for all other cryptos, and in some cases buying one, converting to the other and then selling back could net a profit even with fees.
They'd occasionally ban my IP (but not API key, for some reason) I assume due to lots of order book info requests, even though my bot traded enough volume to certainly more than make up for them in fees.
Eventually it stopped earning anything. I assume the exchange started doing it internally themselves and the profit was had before the orders hit the books.
Could also just be competition. The thing about arbitrage opportunities is that they're usually arbitraged out of existence once enough people become aware of them. All it takes is one faster arbitrage bot front-running you and you won't see any more arbitrage opportunities.
I had to stop running my arbitrage bot because it was getting beat by other bots. All it takes is somebody closer to the exchange to get an edge in the arbitrage game. It was fun but there wasn't enough revenue to justify collocated hosting.
They'd occasionally ban my IP (but not API key, for some reason) I assume due to lots of order book info requests, even though my bot traded enough volume to certainly more than make up for them in fees.
Eventually it stopped earning anything. I assume the exchange started doing it internally themselves and the profit was had before the orders hit the books.