Trading operations are no longer just for professionals; more and more people are joining the financial market of Bitcoin-Motion, which is positive in a certain way.
Let us remember that the objective of the creation of Bitcoin is to make it the currency of the future, displacing the legal tender currencies of the countries.
Step by step, Bitcoin has been taking better and more prominent positions in a digital financial market that at first was a little skeptical about the impact that this digital currency that today heads the ranking of cryptocurrencies could generate.
What is cryptocurrency leverage?
It is a financial strategy that allows crypto asset investors to make loans to offer a more relevant position in the market.
It means that investors want to have more capital to make their investments; what they need is to lend it to the broker, and it will generate a percentage rate that will represent the loss of profit that must be returned to the Exchange.
When leveraging crypto investments, it is essential to consider all aspects of this type of strategy. Let us remember that the greater the investment, the greater the risk.
Before starting to operate, the investor is offered the option of leveraging or not; it is up to the investor whether to take it or leave it.
According to the legislation that governs the Exchange, there is a table regarding the percentages that can be accessed at the time of leverage. Still, the same broker can often decide whether to increase or decrease said rates.
In the case of investments in cryptocurrencies and Bitcoin ETFs, the fee ranges from x2 for Futures Contracts (CFDs).
Leveraged Tokens
This type of cryptocurrency token arises as an option for investors to carry out transactions without being obliged to have the guarantee to be able to liquidate a certain crypto active invested.
The attractiveness of this type of token is that they have the characteristics of futures but are settled in cash.
The BTCUP and BTCDOWN Tokens are the first leveraged tokens in history. They are mainly used in the case of BTCUP; leveraged profits will be generated when the value of the BTC cryptocurrency increases.
In the case of BTCDOWN, leveraged profits will be generated when the price drops.
These types of tokens can usually only be traded at the same broker, and the ability to withdraw to wallets may be limited.
Earnings from this type of leveraged token can range from 1.25 to x4.
Why is it suggested to use BTC Leveraged Tokens?
The volatility of cryptocurrencies is one of the most complex risks to mitigate, so many investors prefer to trade intraday so as not to be subject to high levels of anxiety due to price variations.
This leveraged token proposition offers its users a different strategy that could make profits in both uptrends and downtrends.
The longer the investment period, the greater the volatility effect on the profit generated by trading these digital assets.
The possibility of having variable leverage where the investments generate profits in both cases of market trends is something that many consider incredibly positive.
The purpose of leveraging BTC to both trends is to reduce the long-term risks generated by resistance to change during price movements in the digital financial market.
The BTCUP and BTCDOWN are intended to optimize investment strategies in the financial market; many novices prefer to carry out operations with guarantees than simply throwing their capital to be exposed to risks that may even be unrecoverable.
Let us remember that leverage represents, for many investors, an investment strategy that can be, in some the opportunities, a lifesaver that is fruitful for the displacement of the prices of digital currencies.
Currently, some platforms offer this type of service to their users, where they establish a series of guidelines to follow in the case of investing using the UP or DOWN leverage as the case may be.
By investing with CFD, you can obtain profits upward or downward depending on the movements that the digital financial market shows; it is only necessary to make the correct analysis and take the tools to get the most out of the proposed strategies.
Conclusion
The fact that cryptocurrencies are so volatile and even risky represents, for many investors, a not very safe step to take. Still, market displacement is quite attractive with this type of strategy, such as leverage and obtaining profits in both directions.
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