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Risk management in crypto: Aka ‘the art of not losing all your money’

Republished by Plato

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Risk management is a vital element of success for any trader in any market. No matter the size of the capital you’re trading with or investing in, losses are going to be inevitable, particularly in highly volatile markets like cryptocurrency. Learning how to manage risk to minimize losses is vital. Yet, it’s also necessary to master risk management in order to ensure maximum gains. After all, the more you’re willing to risk, the greater the potential reward.

Risk management to prevent losses

Even experienced traders with impressive track records of reading the market can lose it all on one or two bad trades if they fail to employ proper risk management or let their emotions get in the way. The enticement of “hitting the jackpot” or chasing market sentiment can be too strong, allowing traders to become clouded or overconfident.

To prevent sweeping losses and allow traders to trade with a cool head, the very basic trading tools and forms of risk management must be used at the very least. These include establishing trading rules, such as market orders, limit orders and stop-loss orders, that allow traders to limit their losses by triggering an action when certain conditions are met.

With these types of mechanisms in place, traders can take a break from the screen and trade with confidence, knowing that they can limit their losses or take profit at an acceptable level. At what limit this is set will depend on the risk appetite of the investor and the amount of capital they are willing to lose on a given trade.

Another way of managing risk is, of course, the golden rule of always keeping a diversified portfolio spread out over several assets. This will allow you to gain exposure to more assets while hedging losses and ensuring that one bad investment doesn’t wipe out all your capital.

Risk management to maximize your gains

Last year in the cryptocurrency space, we saw astronomical growth with astounding gains from most major coins. Decentralized finance ignited a passion for yield farming and earning an attractive passive income on crypto assets, as well as enabling an entire ecosystem of borrowing and lending away from traditional finance. Against the backdrop of a struggling global economy due to the global pandemic and near-negative yield on cash savings, investors are turning to the crypto space in droves.

We’ve seen massive endorsements from institutional investors and major names, such as MicroStrategy, Guggenheim, PayPal and Square all lending legitimacy and fanning the flames of “institutional FOMO.” Bitcoin (BTC) has shot up like a rocket this year, blasting through its previous all-time high thanks to this action from institutions. MicroStrategy alone purchased more than 70,000 BTC last year, showing continued bullish support.

And as adoption from institutional investors grows, so does the need for more sophisticated ways of managing risk that go beyond basic market orders and allow professional and institutional traders to execute highly flexible and creative strategies that spread their risk across all assets and amplify the potential rewards.

Until now, such institutional-grade products in regards to risk management have been out of the purview of cryptocurrency exchanges. However, if we are to respond to the needs of this type of investor, serious exchanges must provide the infrastructure that institutions require, including the ability to cross-collateralize their positions and manage their risk more effectively.

Enhanced risk management for ultimate trading flexibility

Through features such as unified account management (otherwise known as Portfolio Margin), traders can manage all their accounts, trades and crypto assets from within one single interface. But more importantly, they can unify all their assets and trade with any instrument, using all of their purchasing power.

For example, let’s say a trader wants to enter an ETH/USD futures trade. With a unified account, they can do this efficiently without having to purchase Ether (ETH) and by simply using any of their existing crypto collateral. This is much more convenient for traders and also reduces the fees associated with buying altcoins with Tether (USDT) or BTC. It also allows them to take a much larger risk and position to amplify their earnings and substantially improve margin efficiency.

Risk management is probably the most important part of investing. If the crypto space is going to continue to grow and attract and retain the interest of institutional traders, we need advanced risk-management tools that can maximize gains for investors — and nudge the crypto market cap into the trillions of dollars where it rightfully belongs.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jay Hao is a tech veteran and seasoned industry leader. Prior to OKEx, he focused on blockchain-driven applications for live video streaming and mobile gaming. Before tapping into the blockchain industry, he had already had 21 years of solid experience in the semiconductor industry. He is also a recognized leader with successful experience in product management. As the CEO of OKEx and a firm believer in blockchain technology, Jay foresees that the technology will eliminate transaction barriers, elevate efficiency and eventually make a substantial impact on the global economy.

Source: https://cointelegraph.com/news/risk-management-in-crypto-aka-the-art-of-not-losing-all-your-money

Blockchain

Dogecoin is Everywhere: from Elon Musk to Mark Cuban to John McAfee

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Dogecoin has become the center of attention of famous individuals once again. Mark Cuban said that his NBA team had become the largest DOGE merchant, Elon Musk made an electronic-god reference, while John McAfee used its growing popularity to defend his alleged pump and dump schemes.

McAfee Touted DOGE Before Musk

The love story between the CEO of Tesla and SpaceX and the popular meme coin is well-known within the cryptocurrency space. Musk has outlined his support for the asset on multiple occasions.

While some believed that the positive engagements with DOGE came from his trolling nature on social media platforms, Musk has repeatedly found different ways to promote the token. The latest one came on Saturday, as he said that “Doge spelled backwards is Egod.”

His support brought more famous individuals to the scene as well – names such as Snoop Dogg and Gene Simmons. Despite the long-term relationship between Musk and Doge, though, John McAfee recently highlighted that he touted the asset long before Tesla’s CEO.

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McAfee was indicted days ago from the US DOJ for multiple criminal offenses, including his alleged involvement in pump and dump schemes with his “Coin of the Day” campaign. Several years ago, the former antivirus tycoon promoted small-cap altcoins that he supposedly believed were undervalued, but US authorities claimed that he made more than $13 million from illicit schemes.

McAfee argued that the allegations are “overblown” and that he indeed considered those coins to have immense potential. One of them was Dogecoin, which, in his words, “has increased well over 1,000% since I chose it.” Ultimately, he concluded that this was “not a pump and dump.”

Mavs Are the Biggest DOGE Merchant

Another Doge-related engagement from high-net-worth individuals came from the owner of the Dallas Mavericks – Mark Cuban. The billionaire and his NBA team recently announced that they had started accepting Dogecoin payments for game tickets and merchandise on the online store.

A few days later, Cuban updated the community on the performance of this new initiative. He said that the Mavs had received more than 20,000 DOGE in transactions, making them “the largest Dogecoin merchant in the world.”

Furthermore, the start of the reality TV series Shark Tank predicted that DOGE will “definitely” reach $1. With a current price of $0.056, the asset would need a 1,700% increase to reach that milestone.

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Source: https://cryptopotato.com/dogecoin-is-everywhere-from-elon-musk-to-mark-cuban-to-john-mcafee/

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Brad Garlinghouse: XRP Will Continue Trading Even if Ripple Goes Away

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With the impending legal battle between the SEC and Ripple, the CEO of the payment processor said that XRP will endure even if the company doesn’t.

Simultaneously, Jesse Powell, the CEO of the veteran US exchange, Kraken, believes that offering XRP trading carries “huge asymmetrical risk.”

XRP Will Endure, Says Ripple CEO

Ever since the US Securities and Exchange Commission brought charges against Ripple for conducting an unregistered security offering, the company’s executives have tried to defend their position multiple times.

During the latest such attempt, the CEO, Brad Garlinghouse, called the lawsuit “misguided” and noted that XRP had traded in the US for eight years before the allegations emerged.

Furthermore, he laid his case on why Ripple’s native token is not a security and promised that the asset will survive even if Ripple ceases to exist.

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“If you own a security, it gives you ownership of a company. If Ripple goes away, XRP will continue trading.”

Garlinghouse explained that numerous other countries, such as Singapore, Switzerland, and Japan, all have “clarity and certainty” that XRP is not a security. In contrast, the US is “the only country on the planet that has suggested that XRP is a security.”

Consequently, the executive doubled-down on a previous narrative stating that the lawsuit against Ripple is “bad” for the entire cryptocurrency industry, not just the payment processor. This is pushing entrepreneurs to seek other options as they plan to leave the US.

It’s worth noting that Ripple is one of those companies that contemplated moving outside the US even before the SEC’s charges became official.

Trading XRP Carries Asymmetrical Risk

While Garlinghouse believes that XRP will continue trading even if Ripple is no more, Kraken’s CEO recently highlighted the potential “asymmetrical” risks for exchanges during these uncertain times for the token.

He assumed that the Commission has acted in “good faith” when bringing the charges and believes that judges ultimately “tend to side with agencies.”

As such, Powell asserted that if the SEC wins, then the watchdog would “say that exchanges should have known.”

Although Kraken took its time before making it official, the veteran US exchange joined the list of trading venues that removed XRP in January this year.

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Source: https://cryptopotato.com/brad-garlinghouse-xrp-will-continue-trading-even-if-ripple-goes-away/

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Ultra (UOS) hits a new all-time high as blockchain gaming and NFTs boom

Republished by Plato

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Video games and online gaming have become some of the largest industries on the planet over the past thirty years as digital technology and the internet have interconnected people from around the world and transformed us into a global society. 

Decentralization and blockchain technology are gathering steam as a transformative new way to operate and build an ecosystem, and Ultra (UOS) is one gaming-focused project that has been gaining momentum in recent months.

Ultra, a blockchain-based PC game distribution platform, is created for gamers and game developers and it allows users to develop multiple revenue streams, including the ability to resell games and in-game items.

Developers for the project have created a customized version of the EOSIO blockchain designed to offer free user account creation and higher transaction throughput through better resource allocation.

Data from Cointelegraph Markets and TradingView shows that UOS surged 225% over the past month as the price rallied from $0.132 on Feb. 1 to an all-time high of $0.42 on Feb. 22.

UOS/USDT 4-hour chart. Source: TradingView

As seen on the chart above, UOS trading volume hit a record $31 million on Feb. 21 and Feb. 22 following its listing on Bithumb.

NFT popularity provides a boost to Ultra

Non-fungible tokens are one of the fastest-growing trends in cryptocurrency currently and UOS has benefited from their growth. The developers at Ultra have been focused on the technology underlying NFTs as they can enable unique in-game items to be resold in multiple marketplaces and eventually on decentralized exchanges. 

Interoperability between blockchain platforms is also a major topic in the crypto ecosystem, and the team at Ultra is developing and beta testing a new mainnet that will retain the ability to operate on Ethereum.

While UOS is interoperable with the EOSIO blockchain, Ultra developers are also exploring NFT interoperability with several other blockchains including The Sandbox (SAND) and Elrond (EGLD). The project also has an evolving partnership withTheta that will enable live streaming gameplay and cross-chain NFT transfers.

Aside from its main association with the gaming giant Ubisoft, recent partnerships with globally recognized companies like semiconductor manufacturer AMD and Atari have also helped propel UOS price higher in 2021.

Big-name partnerships, cross-chain interoperability and the growth of the NFT sector have Ultra well-positioned to benefit from the bullish momentum in the cryptocurrency market.

The games sector is expected to continue its exponential growth for the foreseeable future and as blockchain gaming becomes more popular, UOS could benefit from having the first-mover advantage. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Source: https://cointelegraph.com/news/ultra-uos-hits-a-new-all-time-high-as-blockchain-gaming-and-nfts-boom

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