BTC²; Beyond Speculation
Imagine your exposure to profits is not just doubled, but squared!
Think about the one thing that keeps traders up at night — the sword of liquidation hanging over. BTC², with its ingenious in-kind funding mechanism, effectively shields you from liquidation.
In simple terms, it’s a way to exponentially increase your potential returns. Not just riding the waves, but harnessing their energy.
Linear is a snail; quadratic is a cheetah.
Before we move further, let’s tackle this: what does quadratic price exposure mean? How does it change the game?📈
Quadratic price exposure means that your gains or losses are not in direct proportion to the market’s movements, but are instead related to the square of those movements. In simple terms, as the market moves, your profits or losses accelerate at a much faster rate than the market itself.
For example, with linear exposure, a 10% increase in the market would result in a 10% gain for you. With quadratic exposure, a 10% increase in the market would result in a 21% gain.
But how does this seismic shift come into play? It’s not magic, it’s mathematics. This concept plays with the power of squares; your profit potential is linked to the square of the price movements. The bigger the market movement, the disproportionately larger your gains.
Read the Whitepaper here.
This changes the leveraged trading landscape drastically because it amplifies the potential returns, allowing traders to capitalise on even small market movements.
For advance traders, this provides an opportunity to create more dynamic and potentially lucrative strategies, especially in volatile markets where price movements are substantial. It adds a new dimension to trading, giving traders the tools to not just participate in the market, but to potentially achieve outsized returns.
Let’s explore some use-cases and advantages of using BTC², which allows traders to experience quadratic price exposure without the fear of liquidation.
Technical Day Trading:
Use Case: A day trader looking to capitalise on intraday price movements employs BTC² to gain quadratic exposure to Bitcoin’s price. With an eye on technical indicators, the trader takes positions in anticipation of minor price moves.
Advantage: The quadratic exposure amplifies gains even from small price movements. The elimination of liquidation risk empowers the trader to focus on strategy without worrying about market fluctuations wiping out the position.
Dynamic Portfolio Allocation:
Use Case: A portfolio manager dynamically allocates a portion of a diversified portfolio to BTC² as a non-correlated asset to provide higher yield opportunities in various market conditions through the funding rate mechanism.
Advantage: The quadratic nature of BTC² provides a powerful tool for magnifying returns during favourable market conditions. The elimination of liquidation risk ensures that the portfolio isn’t susceptible to abrupt closures in positions during volatile markets.
Automated Trading Algorithms:
Use Case: A quantitative trader deploys algorithms that can detect patterns for potential breakouts in the price of Bitcoin. By using BTC², these algorithms can take positions which have the potential for exponentially higher gains due to quadratic exposure.
Advantage: The algorithms can capitalize on small movements with greater effect, and the elimination of liquidation risk allows the algorithms to trade more aggressively and optimize profits.
BTC² is not just another crypto asset; it is a paradigm shift.
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