Published in · 5 min read · Jan 12, 2021
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Recently, more and more institutional investors are increasingly buying Bitcoin. Besides, several major firms like Grayscale, MicroStrategy have collectively purchased hundreds of millions of dollars worth of Bitcoin and other cryptocurrencies.
Grayscale has by far the largest Bitcoin portfolio of any institutional investment platform, with over $27.4 billion in currently.
More and more people are talking about Bitcoin, which has added fire to what can now be considered the biggest bull market coming since 2017. And at the same time, Bitcoin already broke 40k. ETH broke 1.3K. Are you ready if the biggest bull market comes!
If the bull market comes, the Leveraged Token will be a good way to make more profits. Because of leverage, it will make more profits compared with spot trading. Compared with traditional margin trading, the Leveraged Token allows investors to gain leveraged exposure without worrying about liquidation risk.
Leveraged Token is one of the derivatives, which provides higher volatility than spot. Normally the leveraged Token name is combined with 3 parts. Asset, leverage multiplies and short/long. For example. BTC3L means Bitcoin 3x Long. BTC3S means Bitcoin 3x Short
We can make BTC as an example:
1. Assume that the Bitcoin current price is 10,000 USDT
2. A sudden 35% decline to 6,500 USDT as situation 1
3. A sudden 35% increase to 13,500 USDT as situation 2
When the BTC price is 10,000 USDT, we use 10,000 USDT respectively to invest in spot BTC, 3x Long BTC(margin trading), and Pionex Leveraged Token BTC3L.
- When the Bitcoin drops to 6500 USDT:
2. When the Bitcoin rises to 13500 USDT:
As we can see, Leveraged Token can make more profits than spot and margin trading if you trade 3L Token while the coin rises. However, you will also lose more if you incorrectly predict the coin trends.
So predicting the coin trends correctly matters a lot. And if bull market comes, mostly top coins all will rise, so Leveraged Token is a good option to make great profits in the bull market.
Grid Trading Bot is suitable for fluctuating and rising markets. So Grid Trading Bot can make great grid profits in the fluctuating and rising market, which means the longer the fluctuating and rising market keeps, the more grid profit the Grid Trading Bot will make.
Pionex Leveraged Token+Grid Trading Bot will help customers to earn more by the leveraged exposure and fluctuation in price, at the same time, avoid risks when the price break out of the normal range.
As the following real bot shows, I keep running this Grid Trading Bot with BTC3L/USDT for about 12 days. Because Leveraged Token will fluctuate around 3 leverage times than spot, Then My BTC3L/USDT Grid Trading Bot makes $70.32/94.77% profits with only 74.18 USDT investment.
Pionex Leveraged Token can avoid the liquidation, but if you misjudge the market and the price increases/decreases to the opposite direction, which may make you loss a lot. Even if the price returns to the normal range again, due to rebalancing mechanism, the price needs to increase/decrease more to cover the loss.
Therefore, Pionex Leveraged Tokens are more suitable for short-term investment while long-term holdings will increase the risk of loss. In addition, there may be a situation where both Long and Short Leveraged Tokens lose at the same time in the extreme fluctuation, please pay attention to investment risks.
You also can join our telegram group to take the further assistance.
👉 Our telegram Group: https://t.me/pionexen👉 Download Pionex: www.pionex.com/download
(1) Don’t keep much position on Leveraged token
Leveraged token does make more profits than trading spot and margin. However if you misjudge the market and the price increases/decreases to the opposite direction, which may make you loss a lot.
(2) Leveraged tokens aren’t buy-and-hold investments
If you’re buying a leveraged token as a long-term investment, you’re using the tool the wrong way. Investing in leveraged tokens for the long-term may sound lucrative in theory. However, in reality, there are significant risks in doing so. Leveraged tokens are rebalanced and re-leveraged based on the market moves, and most investors fail to recognize this impact. As such, leveraged tokens’ long-term performance is unpredictable because of how the compounding effect works differently.
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