BitOffer Institute: Bitcoin once again roller coaster, from futures liquidation to option to earn 100 times the incomes
June 2nd is an unforgettable day for many investors. Bitcoin once highest rose to $10299 and then callback to the 10100 range. After 12-hour sideways, it fell sharply and slammed nearly 800 points in 5 minutes, then was finally supported at 9300. The price returned to 9400 again and restarted a small consolidation.
The huge volatility did not make everyone laugh to the end, some people doubled their profits while insomnia and others suffering the burst. According to statistics, within 24 hours of the current round of the Bitcoin roller coaster, the entire network’s liquidation amount reached 685 million dollars, which is the record high of nearly 1 month.
According to the participant from doubling to liquidation, he held a bullish contract when Bitcoin reached about 10,000. At that time, he felt that it would definitely rise again after breaking 10,000. Even if the price fell, he did not think of closing the position, so he was moderately excited After 12 hours of consolidation, however, he didn’t expect to drop 800 points in 5 minutes without having time to close it.
Lucian, the chief analyst of BitOffer Exchange, believes that many ordinary investors, like the participant, often have no time to react when facing such an extreme market condition. Thus, the best risk control is to prevent future problems.
So the question is, if it is us, how to properly use the leverage when facing such a situation to avoid the liquidation?
Lucian believes that in addition to simply reducing leverage, you can also choose investment tools with smaller risk attributes, such as BitOffer’s bitcoin options. BitOffer’s bitcoin options are a type of investment with 0 margin and 0 handling fees and come with a thousand times leverage. Because options are not margin trading, even if the leverage is as high as a thousand times, there will be no liquidation in extreme markets.
The bitcoin option developed by the BitOffer exchange which is a kind of American option. Buying this option is equivalent to buying a right. For example, suppose we spend $5 to buy 1 bitcoin in 5-min option, when the bitcoin crash on June 2, we can get the benefits of shorting 1 bitcoin for 5 minutes. At that time, when bitcoin fell by $800 in 5 minutes, we made $800. The cost of $5 corresponds to the income of $800, which is 160 times!
Although this is an ideal assumption for extreme market conditions, from the perspective of reducing risk, if bitcoin rose by $800 at the time, we would only bear the cost of options of $5, rather than a loss of $800, because we bought “Rights to get the profit”, there is no need to undertake risk obligations, and truly realize “limited risks and unlimited returns.”
As one of the world’s largest trading platforms for digital currency option derivatives, BitOffer Exchange provides investors with a complete range of Bitcoin and Ethereum options, which can be long and short, with a flexible choice of from 2 minutes to 7 days. It is easier to balance opportunities and risks and deal with huge fluctuations easily.
