There are several strategies people can use when trading cryptocurrencies. Each strategy has a different method and timeframe of conducting trade transactions. It depends on the trader’s knowledge, preference, and market liquidity when choosing which strategy to use.
One of the most common and easiest strategies to use is accumulating and holding. Investors buy coins at the lowest possible price and keep hold of them until the price goes up. By the time the particular coin’s price reaches its projected peak, that’s the time coin holders sell. The difference between the selling price and their initial investment is their profit. Now, this strategy is not recommended for traders who have limited spare cash.
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Some strategies such as ‘taking advantage of breakouts’ and ‘dollar cost averaging’ require traders to have fundamental knowledge about market analysis and prediction. Using these kinds of trading strategies need hours of watching the market and analyzing its movement. These strategies take too much time and require constant learning in order to make a profit. They are not recommended for investors who do not have the time to read, analyze, and trade. It also holds higher trading risks.
One strategy that is often undervalued, but in fact poses a low-risk trading approach and a guaranteed profit is called ‘market-making’.
What is Market Making?
Market-making is a low-risk trading strategy that balances the crypto order exchange book to provide market liquidity. Market makers tighten the bid-ask spread to reduce the transaction cost to buy or sell.
In simple terms, market makers actively buy cryptocurrencies from one investor and sell it to another investor almost instantaneously for a slightly higher price. When anyone wants to sell bitcoins, the market maker acts like a counterparty buying the coins from him. When another person wants to buy bitcoins, the market maker offers bitcoins for sale. The market maker takes responsibility for providing liquidity on the crypto currency exchange (letting people close their buy/sell operations as quickly as possible). The difference between the transaction is the profit the market maker gains. Not everyone can act as a market maker and remain profitable, this strategy as almost any good investment strategy requires knowledge and sophisticates hedging. Traders with 10-100 BTC who want to use the market maker approach may find it challenging to grow their funds without the relevant investment experience.
The Role of Market-Making Tools
FinTech companies and hedge funds have allowed these individual traders with minimum BTC investments to earn profit using a market-maker approach. These companies have built trading platforms where profits are maximized through market making. You wouldn’t need to watch the market, learn about different trading strategies, and do the trades yourself.
There are two main market-making platforms you can easily invest your BTC on and eventually acquire passive income:
Crypto Hedge Funds
When you put your crypto investments to a crypto hedge fund, your money will be pulled and combined into one big fund account. Most fiat hedge funds are very closed in nature and accept only high profile investors, but due to their sophisticated trading strategies they also offer high profile returns. Hedge funds are managed by real investment professionals who take a percentage commission from the profit gained from each cycle, typically 20%. In crypto hedge funds are relatively new thing and there are not so many of them with proven track record in both bearish and bullish market. A good example of those that remain profitable when the prices are falling are professionally managed market making hedge funds.
A good example of a market making crypto hedge fund is Templar Fund. Templar Fund is a privately-managed Bitcoin hedge fund that doesn’t require a minimum amount of initial investment. Unlike other hedge funds where you need to invest worth of $10,000 of crypto assets, Templar Fund can be safely tried with $100.
Templar Fund has proven its profit making capacity by earning a minimum of 2% return on equity every month. It’s recent ROE is 2.919%, which gives $2.34 per $100 deposit. Yet, no one knows who is behind the fund because the owners chose to stay anonymous, but offer full transparency on their trades. This seems to be a fair deal, because instead of convincing you to trust the managers reputation, the fund is offering verifiable track record which speaks for itself.
Crypto Trading Bot
Another tool you can use to grow your BTC investment and get profit from market making is a crypto trading bot. Crypto trading bots are built to analyze the market and do trade transactions at the exact moment the market is liquid enough to gain profit.
One reliable crypto trading bot is called Edison Bot. Edison Bot is a fully-automated market making trading bot who averages a minimum of 2.5% monthly profit. Edison Bot offers two kinds of membership—Basic and Premium—which has a monthly fee of $10 and $20 respectively. Both plans offer a 30% profit guarantee in 12 months. In the instance this 30% is not met, the company promises to pay the difference. This is the only trading bot and one of the few investment tools in the world that comes with guaranteed profit. The low subscription fee and a free trial, make it worth trying.
Like Templar Fund, Edison Bot is also 100% publicly transparent with all their trade transactions. Their most recent trade report showed that Edison Bot has attained 31.413% compound interest in its 5th month of the annual trade cycle. This figure puts Edison on the top 0.5% of crypto trading bots and hedge funds when it comes to profit gains. Basing on the bot’s recent performance, finance experts and investment professionals project that Edison Bot will reach 80% or better in returns as the year ends. It is still not too late to get on this wagon.
Final Words
The strategy of market making makes crypto investment trading safer as it poses minimal to zero risks of receiving a loss compared to other trading strategies. The approach it uses also ensures a profit in every trade transaction–no matter how minimal it is, if done right and managed by trading professionals (in the crypto world less than 1% know how to do it).
Cryptocurrency hedge funds and trading bots provide an affordable risk-free solution for the average trader. Because of its market-maker approach, traders can maximize profit gains without actually spending too much time analyzing market movement. It gives absolutely anyone who wishes to have passive income a better chance to acquire wealth through time.