Crypto Trading in 2018: New Strategies, Bigger Crowds and Diminishing Returns

Crypto Trading in 2018: New Strategies, Bigger Crowds and Diminishing Returns

The cryptocurrency landscape has changed significantly over the past 12 months. Gone are the guaranteed returns of 5x, 10x or greater on ICOs, as a growing number of investors clamor for a piece of the pie. New coins, new forks, and new airdrops have created a competitive marketplace characterized by diminishing returns and reduced profits. The best traders are still able to claim the lion’s share of the rewards though, leaving the rest to fight it out for the scraps.

Also read: Telegram Followers – The New Metric for Cryptocurrency Success

Welcome to 2018, Where 20% Is the New 20x

Crypto Trading in 2018: New Strategies, Bigger Crowds and Diminishing ReturnsUp until last year, the best performing ICOs could be expected to net investors an easy 10x profit by flipping tokens the moment they were listed on an exchange. 2017’s best performers include Spectrecoin, which has provided a 2,143x return on its token price, Qtum (106x) and Neblio (103x). 2018’s best performer, Bluzelle, in comparison, has managed a mere 5x on its ICO price to date. That’s still a healthy profit admittedly, especially when compared to the sort of single digit gains to be enjoyed in traditional asset markets. But by cryptocurrency standards, 500% is small fry.

There are a number of reasons behind the reduced dividends. For one thing, the world has now caught on. Telegram groups promote the most promising ICOs, while projects that attract rapid community interest are prominently promoted, leaving fewer undiscovered gems. Everyone’s looking for the next Stratis, Dragonchain, or Antshares, and it’s not just crypto investors who are wise to this – so are the ICOs issuing the tokens. The best projects, or rather the ones that are generating the most hype, are able to raise their hard cap, increase the number of tokens issued, and bump up the token price in the knowledge that they’ll still sell out in hours. As notorious Twitter trader and shitposter Romano put it, “20% is the new 2x”.

Big Exchanges Are Triggering Smaller Pumps

20% seems an accurate figure for the sort of price bump that tokens added to major exchanges such as Binance and Kucoin can now expect. Bittrex, which has stagnated for months, has finally begun clearing out some of the deadwood, delisting tokens with low trading volume and replacing them with newer entrants. Its latest addition, Vatoms (VEE), was introduced on Friday, whereupon its price pumped by a modest 20%. Six months ago, the same feat would have seen a token previously only available on decentralized exchanges comfortably double in price.

Crypto Trading in 2018: New Strategies, Bigger Crowds and Diminishing Returns

Sites like Etherdelta and IDEX used to be frequented by more experienced traders on account of the complexities of using them, though the masses are catching on. Etherdelta’s interface is notoriously counterintuitive to use, even after successfully completing numerous transactions, while IDEX is at least a little more user-friendly. It’s not rocket science, but neither is it as seamless as setting a buy order on Binance. In January’s altcoin market, everyone was a winner, with everything from scamcoins to shitcoins pumping, causing newbs to conclude that they’d mastered the art of trading. As the mania dispersed and more bearish conditions set in, many of these newfound “pros” were forced to conclude that hodling was perhaps a safer strategy, leaving the riskier trades to those with the crypto wealth and TA skills to make it work.

100x Leverage Is Not for the Fainthearted

One exchange where it’s still business as usual for the top dogs is Bitmex. Thanks to its margin trading of up to 100x, skilled traders can profit handsomely off even the slightest moves in bitcoin’s price. It’s a high risk strategy that’s not for the fainthearted or the charting illiterate. The best of the best are still doing as well as ever though, with AngeloBTC the Twitter trader currently top of the heap.

Crypto Trading in 2018: New Strategies, Bigger Crowds and Diminishing Returns

The changed cryptocurrency landscape hasn’t entirely disadvantaged new traders and investors of low means. Thanks to the craze for airdrops, in which free tokens are awarded to community members for tasks such as following an ICO’s social channels, it’s possible to net up to $500 a month in freebies. It’s not a lot to play with, but with patience and perseverance these meager crumbs can be turned into a respectable pile, aided by a few shrewd trades along the way. The easy money in cryptocurrency may be no more, but there are still plenty of ways for enterprising investors to turn a little into a lump sum.

Do you think cryptocurrency trading has gotten more competitive? Let us know in the comments section below.


Images courtesy of Shutterstock, Twitter, and Bitmex.


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Independent Ratings Agency Alerts Investors About Dangers of Tether

Independent Ratings Agency Alerts Investors About Dangers of Tether

Another outside observer of the controversial tether cryptocurrency is warning about the dangers it presents for the uninterrupted operation of USDT exchanges. Weiss Ratings is seeking to educate investors on the systematic risk tether introduces to the ecosystem.

Also Read: Faced With Criticism IOTA Fans Try to Bully Growing List of Detractors

Inherent Risks of Blind Trust

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss Ratings, an independent U.S. agency which recently published letter grades for cryptocurrencies, has issued an alert to investors about the dangers of tether (USDT). It highlights common fears about the stablecoin which is claimed to be fully covered by U.S. dollar reserves.

“The big issue: There’s never been an audit, and the folks behind Tether has been quite shady when asked. They have continuously claimed their tokens are backed 100% by actual dollars, yet they have failed to present any evidence to support this claim. On social media, there appears to be consensus that what Tether is actually doing is running a fractional reserve system. In other words, most observers claim they DO NOT have the dollars to back up all those Tether coins. I tend to agree. It’s just too suspicious,” says Weiss analyst .

What Happens When the Feds Stop USDT Printing?

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss explains how the importance of USDT to the entire ecosystem is that many non-fiat exchanges (like Binance or Okex) use it as a proxy for real dollars in trading. Because of this, it is the third most traded cryptocurrency and the only one with trading volumes that regularly exceed its market cap. These exchanges are thus dependent on tether for liquidity and put investors at risk if any government decides to pull the plug out of its printers. Some consider this to be a likely scenario under U.S. law.

“The consequences of hanky-panky could be far-reaching. What happens if Tether does turn out to be fraudulent? Or what happens if a major government determines that cryptocurrencies like Tether are being used by exchanges to avoid regulations? What if this large source of liquidity suddenly evaporates?” asks. “Conceivably, it could cause exchange failures. It could drive investors to liquidate their positions, causing sharp declines in market prices.”

Should cryptocurrency investors worry about the continued liquidity of USDT exchanges? Tell us what you think in the comments section below.


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Hong Kong Cracks Down on Securities Tokens – 7 Crypto Exchanges Targeted

Hong Kong Cracks Down on Securities Tokens - 7 Exchanges Targeted

The Hong Kong Securities and Futures Commission has sent letters to seven cryptocurrency exchanges regarding their listings of securities tokens without a license. Most of the exchanges took immediate rectification measures, including removing problematic cryptocurrencies from their platforms.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Hong Kong Takes Action

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedThe Hong Kong Securities and Futures Commission (SFC) announced on Friday that it “has taken regulatory action against a number of cryptocurrency exchanges and issuers of ICOs.”

The agency sent letters to seven cryptocurrency exchanges in Hong Kong or in connection with Hong Kong, warning “them that they should not trade cryptocurrencies which are ‘securities’ as defined in the Securities and Futures Ordinance (SFO) without a licence.”

This regulatory action follows the FSC’s warning last September that digital tokens may be considered securities as defined by the SFO, “and subject to the securities laws of Hong Kong.”

The Commission revealed that after receiving its letters:

Most of these cryptocurrency exchanges either confirmed that they did not provide trading services for such cryptocurrencies or took immediate rectification measures, including removing relevant cryptocurrencies from their platforms.

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedIn addition, the FSC stated that it has also written to seven initial coin offering (ICO) issuers. “Most of them confirmed compliance with the SFC’s regulatory regime or immediately ceased to offer tokens to Hong Kong investors,” the agency confirmed, adding that it will “continue to closely monitor ICOs, and will not tolerate any violations of the securities laws of Hong Kong.”

Furthermore, the Commission said it “may take further action where appropriate,” against any crypto exchanges which disregard the SFO provisions as well as repeat offenders.

Warnings and Complaints

The SFC has warned investors of the risks associated with cryptocurrency and ICO investing several times. Following a warning in September, the agency issued a circular in December cautioning investors of the risks associated with bitcoin futures contracts and other crypto investments.

Hong Kong Cracks Down on Securities Tokens - 7 Crypto Exchanges TargetedIn Friday’s announcement, the Commission noted that it has received complaints from investors about not being able to withdraw fiat currencies or cryptocurrencies from their accounts at crypto exchanges. “Some complainants claimed that cryptocurrency exchanges had misappropriated their assets or manipulated the market, or that technical breakdowns of the exchanges’ platforms caused them significant losses,” the agency detailed. “Several complaints against ICO issuers alleged unlicensed or fraudulent activities.”

The CEO of the FSC, Ashley Alder, commented:

We will continue to police the market and enforce when necessary…But we are also urging market professionals to do proper gatekeeping to prevent fraud or dubious fundraising and to assist us in ensuring compliance with the law.

Earlier this week, the Chinese authorities decided to ban foreign cryptocurrency exchanges. “Unlike the mainland, Hong Kong allows unregulated trading of digital tokens as long as the products changing hands are not in a format that would fall under the SFC’s jurisdiction,” South China Morning Post describes.

The FSC’s action also coincides with the Hong Kong-based crypto exchange Binance suspending trading on Thursday. The company denied that it has been hacked and its CEO subsequently tweeted explaining that the downtime is due to a “server issue on our replica database cluster, causing some data to be out of sync.”

What do you think of the Hong Kong SFC’s action? Let us know in the comments section below.


Images courtesy of Shutterstock and the Hong Kong SFC.


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