Bitcoin, the largest cryptocurrency, has taken a beating in recent days, dropping to its lowest price since October 2017. Despite the slump, a number of digital currency analysts are predicting a pretty quick rebound, with some forecasting a price surge before the end of this year.
Although likely to be only temporary, as history has taught us, this sudden drop in Bitcoin’s value will have caught out many investors.
However, clients of the deVere Digital Assets solution will have been protected from this recent turbulence.
deVere Digital Asset Funds, in association with Dalma Capital Management Limited, took short positions on Bitcoin at $6,300 and Ethereum at $205 before the price dropped under $5,600 and $180, respectively, for the first time this year.
Indeed, the actively managed cryptocurrency proposition, which uses a cutting-edge algorithmic system, is safeguarding investors from the volatility, allowing them to make a profit from the short signals generated by the system.
This, of course, underscores the efficiency and intrinsic value to investors wishing to make the most of the positives of the digital assets market, but with decreased volatility.
How does the system work? When the price of one cryptocurrency, such as Bitcoin, is higher on one platform than on another, this opportunity is recognized to create profit from the price difference across the platforms.
Such trades, known as arbitrage, permit profit to be made, but with negligible directional market risk.
Opportunities have been created in cryptocurrency markets that have not been witnessed in traditional markets for many years.
Indeed, arbitrage prospects are abundant, with the prices of the top 25 digital assets fluctuating over 400 liquidity venues.
As such, the power to trade both long and short means profit potential, no matter the market direction.
As I’ve told the media on numerous occasions, cryptocurrencies are the future of money, this is becoming more and more widely accepted.
That said, in my view, the sway and influence Bitcoin has over the sector will likely dwindle over the next decade. This is mainly because with the growth of mass cryptocurrency adoption, we’ll see more and more cryptocurrencies being introduced by both private and public sector organizations.
This will subsequently increase competition for Bitcoin and affect its market share.
Nevertheless, I remain confident that the crypto sector will increase 5,000 percent over the next 10 years. With the market currently valued at $400 million today, this could see it reach the $20 trillion mark in a decade.
More and more major institutional and retail investors, as well as global financial institutions and regulators, among others, recognize that cryptocurrencies are the future of money.
However, as this present sell-off shows, the cryptocurrency market is volatile, but with the use of pioneering technology advancements, investors can reduce their exposure to such market turbulence.