Winning in the Crypto Market After Coronavirus

Recently we have seen the single largest drop in prices in the cryptocurrency market since its inception in 2009, and what this represents is the severity of the current situation with the coronavirus pandemic.

Although the cryptocurrency market was already beginning to slowly pull back downwards, it was also clearly the effects of the wider financial markets crashing only days before that heavily influenced the crash within the cryptocurrency market.

But now that the bottom has been reached, we have seen a push back up with the potential for the market to recover, and depending on the length of time that the majority of the countries of the world have to remain locked down, we may see quite a strong upward trend in the not too distant future.

We’re going to investigate this a bit deeper, and also to look at a few platforms that we feel are the best to be using during the coronavirus pandemic.

What Happened to the Crypto Market?

The events over the past few weeks have been nothing short of shocking for many traders, particularly those that have not witnessed this level of volatility before.

In fact, the drop in the price of Bitcoin from around $8000 down to less than $4000 in a single day was the largest single-day drop in price that has been seen in the Bitcoin and cryptocurrency market, with the drop in Ethereum during the same period also being the largest that has been seen for that cryptocurrency.

Although the crypto market looked poised for a pullback even prior to the news of the coronavirus, it is undeniable that the novel coronavirus was the catalyst that sent panic and fear into cryptocurrency markets following the decimation of global stock and currency markets as a result of the global pandemic.

In a chain reaction of events, the cryptocurrency market was subsequently hit with similar sharp sell-offs of a wide range of cryptoassets, mirroring what had already occurred in other traditional financial markets.

How Can Profit Be Generated During Crashes?

Although many traders may consider that in times of great turmoil such as currently that the best thing to do is to remove positions from the markets all together, with increased risk also comes increased opportunities for profiting, and it is worth considering whether these opportunities are worth remaining involved in the marketplace for currently.

Volatility leads to larger changes in price over comparable periods of time, and these larger changes in price allow for higher profits to be generated in the crypto market.

One clear opportunity that is present during any kind of crash, or any kind of high volatility such as now, is the use of margin trading in order to profit from both downwards trends, and to increase the magnitude of profits generated during shorter-term flatter trading periods.

Shorting can be used in order to create trades that will generate a profit when the price of an asset drops, and this is obviously particularly useful during a crash, or period where volatility leads to a lot of rapid upwards and downwards spikes in price.

This coupled with leverage, which is the ability to create trades that deliver much larger profits that would normally be possible, can be used to create overall strategies that will maximize the potential for profiting, and often can be used to reduce the risk in higher volatility periods.

Where are the Best Places to Trade During Crashes?

PrimeXBT

PrimeXBT is not only a leader in the cryptocurrency industry, but acts as a bridge to traditional trading markets such as stocks, forex, and commodity markets, where traders can open a single account at PrimeXBT and trade across a wide range of asset classes.

Up to $2 billion in global financial trading every day passes through PrimeXBT, with the platform growing exponentially over the past two years from a point where it launched with 500,000 traders on its waiting list, to today being a leading cryptocurrency multi-asset margin trading platform.

Traders at PrimeXBT enjoy bank-grade security that has protected their funds for years, with PrimeXBT never being hacked, and this is largely being due to advanced security features such as compulsory bitcoin address whitelisting being included on the platform.

As well as being a great place to trade during volatility, PrimeXBT is the only major cryptocurrency trading platform to provide fully KYC-free trading, meaning that all that is needed to set an account up as an email address, without any invasive information being required, and accounts being able to be set up in just 30 seconds.

Bitfinex

Bitcinex is one of the oldest cryptocurrency trading platforms on the market today, and not only manages one of the more prolific cryptocurrency trading platforms around, but also manages the world’s largest stable coin, Tether.

Bitfinex provides a clean-cut easy to use trading interface, along with a wide range of the world’s leading cryptocurrency assets on the platform.

As well as this, margin trading is available on the Bitfinex, and this provides a range of opportunities for traders during volatile periods to monopolize, by being able to use shorting and leveraging.

Although Bitfinex is a good platform to use during volatility, the platform has dealt with its fair share of scandal over the years, with perhaps the main concern of much of the cryptocurrency market being that Tether has never been audited and many of accused it of being an unbacked stablecoin, which the Bitfinex vehemently denied.

All things taken into account, Bitfinex is a solid choice for anyone wanting to trade during volatility in global markets.

What is the Near Future Looking Like for Crypto Markets?

While we currently find ourselves in the midst of conditions that would indicate downwards pressure, at least over the short run, once the coronavirus turns around and following the next few months there is actually a significant amount of upwards pressure to come.

One of the main factors for this is that in May we will experience the third “halvening” event in Bitcoin’s history, which is an event that reduces the supply of Bitcoin that is produced from mining each day, and consequently has always led to the beginnings of a bull run lasting roughly about 1.5 years.

As well as this, there are institutional investors from mainstream finance around the world that have been poised for years to enter the cryptocurrency market in a big way, and the magnitude of the investment that they will be able to bring the market is completely unprecedented.

With the launch of Bakkt, as well as the impending launch of a number of Bitcoin ETFs in 2020, the tidal wave of investment that may slam into the cryptocurrency market is likely to see huge upward trends over the coming 1 to 2 years.

In Summary

In fairness, the entire world was blindsided by the fact that the coronavirus pandemic has had socially and economically.

This is no more evident than the flash crashes that we’ve seen in the stock markets, money markets, and also the cryptocurrency market, with these downward surges not being seen at this level since at least 2008, if not earlier.

However, there is optimism that the factors which are just over the horizon relating to the Bitcoin halvening and upcoming bull run are likely to make this a period that we will look back on and see as an excellent entry point into the cryptocurrency market.

What’s most important during these times is the selection of a high-quality trading platform to maximize the likelihood of generating profits, and if you’re searching for a trading platform within the cryptocurrency market that is safe and reliable, look no further than the platforms we’ve listed above.