The popularity of the cryptocurrencies has increased significantly in the past two years. Increasingly investors are seeking to join the crypto world as a result of trading operations that exceed USD 45 billion in value on a daily basis.Liquid, one of the pioneers in the trading margin of cryptocurrencies, provides its users the ability to maximize gains from trading Bitcoin without possessing it, with a leverage of up to 25 times. The trading cash is still an option when you execute the purchase and sale of a specific currency. However, the trading margin allows to obtain higher yields with the same amount of investment.
Contents
To operate safe in Liquid
With the sector of the cryptocurrencies still in maturation arise security problems. Liquid is registered with the Financial Services Authority of Japan, known for its stringent regulatory frameworks. Liquid used two-factor authentication, a cool-down period to reset passwords and lists of IP, so only you (the user), you can access the trading platform of Liquid.Additional to the security measures mentioned previously, your funds are stored offline in a wallet cold and the potential risks of different losses by the trading are almost non-existent.The trading margin allows the loan of funds directly from the exchange, depending on the multiplier of the leverage chosen. If, for example, a person wishes to invest $ 25,000, but the balance of your account is only $ 1,000, you could use the leverage of 25x on the platform of Liquid to open long and short positions.
Taking advantage of the Leverage
Long positions are bets that the value of an asset because it will increase. For example, if you bet 10,000 USD in Bitcoin with leverage 2x in a long position and the price of Bitcoin goes up, the profits obtained will be two times higher. This is due to the multiplier of leverage.If, let’s say that we’re going to borrow another $ 10,000 on the pool of loans of the exchange and consider that the price of BTC will increase from USD 10,000 to USD 15,000, the following will happen: in a ratio of 1: 1, the gain obtained will be us $ 5,000, but if you opt for a leverage of 2x, will allow you to generate higher revenue, USD 10,000 in this case.Short positions work in a similar way, but are betting that the value of a particular asset will decrease. For example, if you open a short position on Bitcoin with USD 10,000 with a leverage of 2x, and the price of Bitcoin falls from USD 10,000 to USD 3,000, you will get USD 14,000, compared to USD 7,000, which would have generated without leverage.
Trading in Liquid
Liquid lends money from a so-called “loan fund”. This is a pool of liquidity exclusive, where users can borrow funds or loan for a given interest rate.However, leverage also entails higher risks because it is not operating only with their funds. A fall in the price of the five per cent for a long position could result in a loss of 10% if the leverage of your position is 2x. If the price of the asset that you opened the long position continues to shrink, will cause the liquidation of the position in order to avoid greater losses.The trading margin is the best friend of a trader when it comes to harnessing the power that it possesses a particular asset. As the cryptocurrencies continue to ripen and to be recognized as a global force in motion, the leverage in Bitcoin, Ethereum and other cryptocurrencies, may be the best move for inexperienced traders and the big players retailers all over the world.The market is open 24 hours a day, 7 days a week, and the operations do not go through intermediaries in most of the exchanges. For more information, you can visit the help section of Liquid, which provides very complete information on various aspects of the trading of criptos.Disclaimer: The contents and the links provided in this article only meet for informational purposes. Breaking News does not provide recommendations or advice on legal, financial, or investment, or replace the due diligence of each interested party. Breaking News does not endorse any Initial Offer of Currency, investment offer or similar here promoted. For more information click here.