Apr 21, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly highlight — Trump wants to fire Powell? 

US president Donald Trump is actively considering firing Federal Reserve Chairman Jerome Powell, following Trump's public criticism of Powell for not moving quickly enough to reduce interest rates. National Economic Council Director Kevin Hassett confirmed that the administration is examining this option, suggesting that Powell's actions have politically favored Democrats. Hassett argued that the Federal Reserve's decision to raise interest rates shortly after Trump took office was intended to undermine the economic impact of the tax cuts implemented during his administration, which were deemed inflationary. He further criticized the Fed for not addressing inflation concerns stemming from federal spending under President Biden, implying a lack of accountability.

During a recent press conference, Trump conveyed his dissatisfaction with Powell, asserting that if he wanted to remove him, it could happen "real fast." While he did not explicitly state his intention to dismiss Powell, his remarks highlighted the growing tensions between the White House and the Federal Reserve regarding monetary policy. Hassett defended Trump's frustrations, advocating for a focus on economic policy rather than interpersonal conflicts. This situation underscores the complex dynamics between the executive branch and the central bank, as Trump navigates economic challenges leading up to the next election.

Weekly crypto highlight — XRP ETF coming

HashKey Capital has officially launched the HashKey XRP Tracker Fund, marking the first investment fund in Asia designed specifically to track the performance of XRP, the digital asset integral to Ripple's global payment ecosystem. This fund is aimed at professional investors and offers a unique opportunity to gain exposure to XRP without the complexities of direct asset management. Investors can subscribe through cash and in-kind options, with the fund providing monthly liquidity.

Ripple, as an early backer of the fund, is looking to enhance its strategic partnership with HashKey Capital, which already manages Hong Kong–listed spot ETFs for Bitcoin and Ethereum. This collaboration not only solidifies Ripple's presence in the Asian market, but also opens avenues for future financial products, such as the potential tokenization of a money market fund on the XRP Ledger. Fiona Murray, Ripple's Managing Director for the Asia-Pacific region, highlighted that this partnership is part of a broader strategy to introduce more regulated cryptocurrency products for institutional investors in the region, aiming to foster a more robust crypto landscape in Asia.

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Weekly Institutional Insights: Trump’s desire to fire Powell might induce volatility; XRP ETF coming

Hong Kong's Securities and Futures Commission (SFC) has approved a new Ethereum ETF with staking capabilities, allowing institutional investors to earn staking rewards.

Daily top performer — Pyth Network (PYTH)

The S&P 500 dropped 1.5% to 5,282.70 this week, down 5.9% in April and 10% year-to-date, led by tech losses. Real estate and energy outperformed, while political pressure on Fed Chair Powell and inflation concerns weighed on sentiment. Gold dipped 0.6% to $3,319 after a record high, as Powell’s stagflation warning tempered its rally. Despite the pullback, the uptrend remains intact. The Coindesk Indices, which tracks the broader crypto market, are up by 0.77%, with Bitcoin and Ether rising 0.64% and 0.72%, respectively, over the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is PYTH, up 10.1%, following the launch of Pyth Entropy for secure on-chain random number generation by Soneium.

Pyth Network (PYTH),  is a blockchain oracle system that delivers real-time crypto price data to blockchains, enabling smart contracts to react to market changes. Soneium 

 Pyth Entropy, a tool for securely generating random numbers on-chain. Two apps, HandsNFT AI and 2p2e, are already utilizing Pyth Entropy to create unpredictable and engaging experiences.

Check out the latest prices, charts, and data of 

Hong Kong's Securities and Futures Commission (SFC) has approved a new Ethereum ETF with staking capabilities, allowing institutional investors to earn staking rewards. This approval follows recent changes to local laws, with China Asset Management (ChinaAMC) partnering with OSL Digital Securities to launch the ETF by May 15. The ETF will offer exposure to Ethereum staking, transforming it from a passive investment into an active participant in the Ethereum network. The staking process is powered by Kiln, with OSL providing custody and insurance services. The rewards will contribute to the ETF's net asset value, benefiting shareholders.

Yesterday, Bitcoin spot ETFs saw $25.9M in inflows, all from non-GBTC funds, while GBTC recorded no flow.

" and a points campaign called Drops, where users can earn points—potentially leading to an airdrop—by engaging with Linera content on X. To join, sign up on 

, complete tasks like joining Discord and interacting on X, then enter the campaign. Keep engaging to earn more points, but avoid spamming.

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Hong Kong approves Ethereum ETF with staking rewards, boosting institutional participation

Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

US president Donald Trump’s tariff policies are influencing both crypto and US equities. Last week, BTC and the S&P 500 rallied due to a 90-day pause in reciprocal tariffs (excluding China). Equities are slightly below their April 9 highs, while BTC is holding above $83K. Its implied volatility term structure has normalized, and the volatility skew has improved from last week’s bias toward out-of-the-money puts, though it hasn't fully shifted toward calls.

Please check out the report’s highlights.

Tariff pause briefly brings back trading volume

Since our last report, open interest surged on Apr 9, 2025, as crypto spot prices rose after President Trump’s temporary tariff pause, accompanied by a nearly $10B increase in trade volumes. However, trade volumes have since returned to mid-March levels, and open interest has declined from the April 9 highs. The initial price spike indicates the tariff pause surprised the markets, but the subsequent pullback reflects concerns over remaining tariffs.

After being inverted for much of April due to trade policy shocks and macro headwinds, BTC’s term structure has disinverted, with front-end volatility dropping significantly this week. Call and put volumes have been balanced, with calls slightly exceeding puts most days. Apr 9, 2025, reflected mixed market sentiment, as both call and put volumes rose, but puts were higher overall. Open interest remains greater in calls, and has increased slightly since last week, reaching its highest level for the month (more than double from the beginning of April).

Despite a rally on Apr 9, 2025 that brought ETH close to $1.7K, traders sought downside protection, leading to higher volumes in put contracts as compared to calls. Since then, ETHUSDT options volumes have declined, but open interest remains strongly weighted toward calls with later expirations, which have increased since last week. After being inverted for much of April, ETH’s term structure of volatility has flattened, with volatility compressing around the 70% mark across tenors.

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Bybit X Block Scholes crypto derivatives analytics report (Apr 16, 2025): Bitcoin put bias has moderated, but not yet shifted to calls

KiloEx (KILO) is a user-friendly DEX for perpetuals trading, offering high leverage, rewards, LSTfi integration and a robust multi-chain ecosystem.

 trading is one of the most lucrative areas for cryptocurrency enthusiasts if you know how to navigate the sometimes complex world of these contracts. Unlike standard futures, perpetual futures contracts have no expiration date, allowing traders to hold onto their positions as long as they prefer. You only exit a crypto perpetual (or “perp”) contract when you feel it’s the best time to execute your long or short trade. The lack of an expiration period makes these contracts attractive for traders.

Unfortunately, many crypto perpetual contract trading platforms are far from user-friendly. It seems like many perpetual crypto exchanges assume that only professional traders dabble in these contracts, and along with that assumption goes a second one — that these pros can navigate even the most complex user interfaces. As a result, finding a user-friendly perps platform is a challenge in the world of crypto trading.

 (DEX) that aims to change the status quo by providing a user-friendly environment for traders. Its platform also offers high leverage ratios, integration into the wider liquid staking token finance (LSTfi) ecosystem and generous reward programs for referrers and affiliates.

Thanks to its numerous benefits, this DEX caters to the needs of traders at all levels of expertise who are interested in crypto perpetuals. Operational since mid-2023, KiloEx launched its native token, KILO, in March 2025 to further enhance its platform's reward, staking and governance mechanisms.

 (BNB) that specializes in crypto perpetual futures trading.

 The platform prides itself on offering a user-friendly interface, high 

 ratios of up to 100x, multi-token vaults with generous APYs and a number of reward programs for referrers and affiliates.

Co-founded by Joey Ni (CEO) and Charles Gong (COO), KiloEx was originally launched on BNB Chain's mainnet in June 2023. As of mid-April 2025, the platform has additionally expanded its service coverage to five 

 (B2). This coverage allows KiloEx to access the ecosystems of three leading blockchain platforms — 

Manta, Base and Taiko are Ethereum-focused Layer 2 solutions, while opBNB is an efficient and low-cost optimistic rollup for the BNB Chain, while B

 is a platform linked to Bitcoin that acts as a major Bitcoin DeFi (BTCFi) enabler.

Because it’s a BNB-native platform, KiloEx's industry footprint is most notable within this blockchain's broader ecosystem. In fact, as Apr 17, 2025, KiloEx is the top DEX on the opBNB network by 

Using Layer 2 chains allows KiloEx to offer its users fast and low-cost transactions, which isn't always possible on a typical Layer 1 network. It's true that BNB Chain, the primary Layer 1 used by KiloEx, generally has much lower gas fees than Ethereum, the industry's leading 

 chain that’s notorious for its exorbitant costs. However, KiloEx's partner Layer 2 networks help drive costs and transaction times even lower. BNB Chain's current average gas fee is slightly over $0.10, while the opBNB Layer 2 rollup's comparable fee is only about $0.005.

In 2024, the platform introduced one of its most innovative features — the 

, which allows liquidity providers to stake multiple assets to earn high yields. That same year, KiloEx significantly expanded its partnership network, becoming an active player in the LSTFi ecosystem. LSTFi is a new stream within the DeFi industry that allows you to use 

 (LSTs) on various protocols for additional yield.

Having solidified its market presence in 2024, the project launched its native token, KILO, in March 2025. However, in mid-April 2025, KiloEx 

 and halted trading on April 15 as a risk management measure, pending investigation of the damage.

The Hybrid Vault is among the most innovative features offered by KiloEx. Essentially, it acts similarly to liquidity pools on other exchanges. Liquidity providers can contribute their crypto funds to the vault to support trading activity on the DEX and earn interest on their contributions, based on the fees earned by the protocol.

You can contribute a mix of coins to a KiloEx vault. Supported assets include 

Depending upon trading activity and the mix of coins contributed, you can earn APYs as high as 30%, making KiloEx one of the most lucrative choices for liquidity providers in this niche.

KiloEx uses a health factor calculation for this type of vault to keep your funds and the entire ecosystem safe. Based on the health factor score of your contribution to the vault, your funds could be liquidated if their value drops dangerously low.

Discounts are also offered for fixed-term deposits for established assets, such as USDT and USDC. Withdrawals for the fixed deposits are processed upon maturity, while all other withdrawals are processed within one to three "epochs," with each epoch on the platform lasting about three days. Thus, depending upon your contributed funds, you’ll wait anywhere from three to nine days to receive your crypto back.

The KiloEx platform also runs a generous referral program under which you can earn rewards for referring your friends to the platform. The amount you earn depends upon the trading volumes generated by the people whom you’ve referred. Additionally, your referees to the DEX can also benefit from fee rebates, again depending upon the volume of trade they generate.

There’s a tiered system, comprising nine levels, based on which you and your friends earn commissions and rebates. Under this system, even those referred traders whose monthly volume is at the lowest level (below $5,000) can still benefit from 5% rebates, while you also earn a 10% commission.

The table below shows the structure of this referral system with percentages for commission and rebates based on monthly trading volumes.

KiloEx offers an affiliate program for key opinion leaders (KOLs) with a certain level of social media following and influence in the crypto market. KOLs may apply to join the program by filling out an application, which is then considered by the project team within 48 hours.

To qualify for affiliate status, a KOL must have: 

Approved affiliates are provided a link to the platform, and are encouraged to invite their followers to trade on the KiloEx. If they invite at least five followers who trade at sufficient levels, the affiliates can start earning their commission. KOLs can earn up to 55% commission, depending upon the referred followers' trading activity.

KiloEx’s native utility token, KILO, is a 

 asset launched on BNB Chain. It’s used on the platform for governance, fee discounts on trades, rewards via 

, liquidity provision incentives and staking.

KILO is a supply-capped asset, with a maximum and total supply of 1 billion. The token’s supply allocation shares are shown in the chart below.

xKILO is an escrowed version of the KILO token. You can convert KILO to xKILO at a fixed rate of 1:1. The primary utility of xKILO is to provide boosted liquidity provision, which makes it possible to receive staking rewards. By locking xKILO on the platform, you can access special discounts and other benefits reserved for VIP-level users. Holding xKILO also grants you governance power to vote and influence the platform's future direction.

Unlike KILO, xKILO is nontransferable and isn’t tradable on the secondary market. The only ways to obtain xKILO are either to buy it with KILO or receive it via airdrops.

Platform users can earn points to qualify for KILO airdrops. Typically, you accumulate points by trading, depositing funds, referring others to the DEX, checking in to the platform and completing other specified eligible activities.

The project’s initial airdrop, Genesis Season, had an eligibility snapshot taken back in July 2024. Under the currently running airdrop campaign, Pioneer Season, users can earn points to receive KILO tokens for 180 days past the token generation event (TGE) in late March 2025 (i.e., until late September 2025).

Additionally, you can earn KILO tokens on Bybit simply by participating in the 

 event and holding BNB in your account. Every day at various random times, Bybit will take snapshots of your BNB holdings in your Funding and Unified Trading Accounts to calculate the number of KILO tokens you’re eligible for. The campaign will run through Apr 25, 2025, 11:59PM UTC, and you’ll have your share of KILO airdropped seven days after this date.

 market as a swap pair with USDT. If you don't have a Bybit account, you can easily 

, and access opportunities across hundreds of trading pairs and crypto products on the exchange's Spot and Derivatives markets.

As of Apr 17, 2025, the KILO token is trading at $0.039, which is 76.2% lower than its ATH of $0.1648 on Mar 27, 2025, and 17.3% higher than its ATL of $0.03344 on Apr 12, 2025.

Long-term price forecasts for KILO are mostly bullish. CoinCodex 

 at $0.0387 in 2027 and then rise to $0.135 in 2030 while PricePredictions 

When it comes to perpetuals trading, both traditional 

 (CEXs) and DEXs have often struggled to offer an intuitive trading experience. In contrast, KiloEx has made user-friendliness a cornerstone of its operations. With KiloEx, you can enjoy a streamlined trading process, access market trends info for thorough research, get an overview of the cryptocurrency market and conduct other activities via an interface that’s designed for anyone, irrespective of their familiarity with decentralized trading.

The platform also boasts a diverse range of other benefits not easily found in the world of perpetuals-based cryptocurrency trading — generous leveraged trading options, trading fee discounts, lightning-fast trades, low trading fees and an innovative Hybrid Vault system. Many of these benefits are thanks to KiloEx's collaboration with several Layer 2 decentralized platforms, which provide the technical infrastructure to enable low costs and fast order processing.

If you’re a crypto perpetuals enthusiast, KiloEx is definitely a platform to peruse.

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KiloEx (KILO): More than a DEX — a rewarding ecosystem

Trading

Strategies

Not only does having the best crypto trading strategies help you maximize profits - it gives you peace of mind to trade BTC or altcoins despite the volatility. Here's what you need to know.

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If you are hoping to profit from trading cryptocurrency, then you’ll benefit from arming yourself with ample insight and a well-crafted crypto trading strategy. 

There are many viable approaches to trading crypto. From spot trades and exchange arbitrage, scalping to day trading and every cryptocurrency owner’s favorite buzzword, HODLing, traders have a wealth of options at their disposal. After choosing a reliable exchange, even a novice trader can start trading quickly. 

This guide will take you through the fundamentals of strategic cryptocurrency trading. We’ll give you an overview of active and passive trading methods, long- and short-term crypto trading strategies, and how to use these techniques to your advantage. 

What Is a Cryptocurrency Trading Strategy?

A cryptocurrency trading strategy is a plan for buying and selling cryptocurrency that minimizes risk while improving the chances of turning a profit. A well-defined trading strategy mitigates trading risks and dictates trading reactions to varying situations in the market. 

Having a trading strategy helps keep emotions out of trading decisions, in order to more strategically coordinate trades.

A comprehensive trading strategy may include:

With assets, trading configurations, indicators, entry and exit patterns, and other trading guidelines stipulated beforehand, you can create a comprehensive plan.

There are two basic types of trading strategies. Active trading strategies require your intervention and call for conscious, regular attention. Passive trading strategies use less time and don’t require frequent attention. Usually, you’ll be following a well-established method that does not require constant monitoring. We’ll be discussing both approaches presently. 

Forex Trading vs. Crypto Trading: Differences

Cryptocurrency trading is the trading of cryptocurrencies across various cryptocurrency exchanges. Forex trading is the trading 

 Forex market. Here’s a brief breakdown of the main differences between Forex trading and cryptocurrency trading:

Forex markets are typically far more liquid and deep than cryptocurrency markets, with larger institutional and corporate players who buy and sell Forex for hedging and cross-border transactions. Cryptocurrency markets are still usually characterized by retail investors who are trading for individual portfolios.

Forex markets are regulated. They always go through centralized broker-dealers, exchanges and clearinghouses. Cryptocurrencies, on the other hand, can trade peer-to-peer directly through centralized or decentralized exchanges. 

Unlike cryptocurrency trading, where you have the option to buy cryptocurrency assets in the form of tokens or coins, Forex trades fiat currency pairs as contracts for differences (CFDs.) There is no ownership exchanged when trades are made, but rather simply profit or loss, according to the broker’s price movement. 

Trading cryptocurrency doesn’t require any brokers, and both CFDs and ownership-based trading are available. Unlike Forex, which operates on weekdays only, crypto markets never close. The volatility of cryptocurrency markets is also much higher than in the highly liquid and tradable Forex markets. 

Investors trade cryptocurrency across various crypto exchanges. Here is an overview of the definition of, and differences between, spot market trading and cryptocurrency derivatives markets. 

 is any market in which a cryptocurrency coin or token trades directly, essentially “on the spot.” Trading on a spot market is the most fundamental form of trading in which to exchange and settle a cryptocurrency for another asset. 

The process begins with traders depositing funds into an account held by a cryptocurrency exchange. Buy and sell orders are then placed and executed. 

Cryptocurrency spot markets involve makers and takers. Makers place orders, such as a limit order, that don’t get filled immediately. Takers place orders that get filled in their entirety, “taking” existing orders created by makers.

A derivative is a financial security that 

s its value from an underlying asset or group of assets. In the crypto market, these derivatives are typically futures contracts, options contracts, leveraged tokens and token swaps. For example, an option contract involves entering into an agreement to buy cryptocurrency at a predetermined date and value in the future.

Unlike spot markets, cryptocurrency derivatives exchanges can offer greater borrowing capabilities (leverage), which can magnify profits or losses. For example, Bybit offers crypto derivatives trading with up to 100x leverage. Derivatives contracts also offer the opportunity for advanced trading strategies like trading pairs, arbitrage, shorting the market and spread trading, to name a few. 

Short-term trading, otherwise known as active trading, involves more frequent transactions. Here is a breakdown of the main short-term trading strategies available. 

Day trading involves entering and exiting a position throughout and typically within the day, aimed at turning a profit. Even though crypto exchanges do not close, day trading still refers to a short-term trading style whereby traders attempt to secure profits from same-day price movements. 

Day traders devote their time to trading on favorable price movements within cryptocurrency markets as they happen. They may rely on a combination of 

, technical analysis and other analytical techniques to find inefficiencies in the market in hope for profits. For example, day traders might try to trade off of one-, five- or fifteen-minute price charts.

The volatility of crypto leads to many potential opportunities, but it takes keen market insight, significant trading experience and a bit of luck to rely on day trading for a predictable income. The truth is everyone can be a day trader but it takes time, effort, and it can be stressful at a time. Hence, day trading is recommended for advanced traders.

 focuses on extremely short-term trades to profit from small cryptocurrency price movements on high volumes. Scalpers can open and close positions within seconds or minutes, taking advantage of lucrative market inefficiencies to rack up small profits. Scalpers are quick on the move making small moves consistently profiting from the bid-ask spreads and general inefficiencies in the crypto market. That is why scalping is relatively similar to high-frequency trading (HFT). Mastering a scalping strategy takes both extensive knowledge of cryptocurrency and advanced analytical skills to take advantage of real-time volatility in the way that scalpers do.

Many day traders utilize scalp trading, devoting a portion of their trading budget to scalping. Experienced traders use technical analysis and extensive charting to find time-sensitive opportunities and decide quickly whether to implement their trading strategy. Traders also need well-defined goals associated with scalping, along with a clear exit strategy.

Scalping is relatively suitable for traders who aim to make more profits with larger positions. It makes the most sense for traders, institutions, or organizations that hold large amounts of crypto (whales) to scalp. 

 capitalizes on the price differences between cryptocurrencies across various markets. Arbitrage traders typically purchase a cryptocurrency from one exchange and then immediately sell it for a higher price on another, seizing the profit. While profits aren’t actually guaranteed, arbitrage trading holds the lowest risk and normally grants the slimmest profits. 

CoinMarketCap lists over 300 spot market exchanges, a tally that’s growing steadily. The vast range of trading platforms means many opportunities for short-term traders to find and capitalize on inefficiencies. Arbitrage trading is recommended for those who have prior experience in this type of trading style. It’s labor intensive and timing is everything. 

 considers a longer-term trading strategy in which traders attempt to capitalize on short-to-medium-term price trends, or “swings,” in cryptocurrency market activity. Most swing trades involve gains over a period of a few days to weeks at a time. As opposed to day trades, swing trades typically take longer than 24 hours, and can even last days or weeks. 

Swing traders identify the waves of volatility of a cryptocurrency coin or token that is likely to move, and then enter into a position for a variable period. If the move comes through, the trader captures a profit. 

Swing trading is beginner-friendly as it gives traders more time to devise reliable trading plans. Swing charting techniques include seeking highs and lows with the Gann swing method, reversal pinpointing with candlesticks and oscillators, relative strength index momentum indicators, and patterns like bullish and bearish engulfing patterns. 

Trend trading, also referred to as position trading, makes cryptocurrency investment decisions based on a coin or token’s momentum. It is normal for traders to hold a position over an extended period which can last up to a few months. Trend crypto traders analyze momentum, looking for upward or downward trends, and then enter into a trading position while speculating that the coin or currency will trend upward or downward. 

Trend traders often rely on fundamental analysis to enter into advantageous trades. However, they can also factor in a variety of technical indicators. Moving averages, relative strength index (RSI), moving average convergence divergence (MACD) and trend lines are four common trend trading indicators used to increase the success rate.

The two main ways to trade cryptocurrency over a short-term period are trading pairs and cryptocurrency derivatives trading. While trading pairs uses a combination of spot trading and arbitrage to net profits, derivatives trading involves trading contracts initiated based on trader speculation. Let’s take a closer look at both styles. 

Trading pairs in cryptocurrency takes advantage of the price difference between pairs of currencies or tokens exchanged across various markets. Traders may use arbitrage trading between crypto exchanges to secure a profit from the relative difference in value between pairs. 

A base currency is used to initiate a trade. For example, a BTC/USDT trading pair listing would exchange BTC for USDT. Cryptocurrencies can either be exchanged for one another or for fiat money like the U.S. dollar (USD) in the form of USD-backed stablecoins, such as BUSD, USDT, etc.

Derivatives trading uses financial instruments that determine their value based on an underlying asset. These instruments typically settle based on the spot value of a given asset. Derivatives add a layer of leverage and the ability to speculate on price action. 

Futures, options and perpetual contracts are the most commonly used derivatives. Let’s take a closer look at each type of cryptocurrency derivatives trading commonly available. 

Cryptocurrency futures are contracts between two parties agreeing to exchange a coin or token at a given price on a predetermined future date. Neither party is bound to hold the underlying asset. In fact, the contract is usually settled in USD or another fiat currency. 

Typically, the market offers a specific time frame or duration for the contract. After deciding to speculate that a cryptocurrency asset will increase in value, a trader can open a long position. Similarly, a trader who expects a decrease in value can open a short position, which means selling the contract without actually owning the asset. Every trading position is matched to another trader taking the opposite side.

At the settlement date, each trade will be settled against the settlement price. If you’ve chosen to go long and the price moves up, you’ll profit. If you’ve chosen to short and the price goes against you, you’ll then make a loss.

Cryptocurrency options are derivatives contracts that don’t force the trader to settle after reaching the pre-specified future date. Instead, traders are given the option to buy or sell at that time and price. 

A call option gives the contract owner the right to buy a cryptoasset at a predetermined price when the contract reaches its settlement date. A put gives the contract owner the right to sell. Both scenarios leave the owner of the option with the choice to trade, according to the previously determined parameters at the expiration date. 

One of the most commonly used forms of cryptocurrency derivatives trading is a perpetual contract. 

 work similarly to other derivatives, but they don’t expire. Instead, perpetuals let traders keep their open position for an indefinite period. They require a margin, or minimum cryptocurrency balance, to be maintained. 

Perpetual traders must keep the funding rate in mind. The lack of a settlement date on perpetual contracts can lead to price deviation between the contracts and a cryptocurrency’s value. If a positive funding rate occurs from an imbalance of long positions, all long positions pay shorts. When a funding rate is negative, short positions pay longs. 

Leverage allows traders to trade on a larger position than the value of cryptocurrency held on their account. Essentially, leverage and margin trading lets you borrow from the crypto exchange so that you stand a chance to make a higher profit with that larger position. 

Leveraged trading requires the trader to retain an amount known as a margin, which is calculated according to the leverage offered. For example, if the broker or exchange requires a 1% margin for 1:100 leverage, the trader will need to retain a balance of at least $1,000 to open a $100,000 trading position.

Long-Term Trading (Passive Income Trading)

Long-term trading, also known as passive income trading, holds distinct advantages over short-term strategies for traders who do not have much time or advanced insight into crypto markets. Here’s a breakdown of the main long-term cryptocurrency trading methods. 

Buy and Hold, better known as the misspelled acronym “HODL,” is a trading strategy that involves holding onto investments in hopes of long-term gains. By buying and holding cryptocurrency and speculating on exponential growth, HODLers may disregard much of the volatility of cryptocurrency markets. 

By ignoring short-term swings, instead ”Holding On for Dear Life,” traders no longer suffer from Fear Of Missing Out (FOMO) and Fear, Uncertainty and Doubt (FUD). FOMO is the number one cause of buying at too high a price, while FUD leads to SODLing (or “selling at too low” of a value.)

A buy-and-hold strategy has additional advantages, such as cutting out short-term market noise, lowering transaction costs and relieving investors of the psychological burden of watching markets constantly.

Cryptocurrency index trading means investing in tokens or coins grouped together as an index. Indices are used to track collective movements of the assets. These grouped assets also usually have lower volatility than individual assets. 

Crypto indices group cryptoassets according to price weighting and market cap weighting. Price weighting is when the higher-priced coins and tokens influence the index’s movement more than lower-value assets. Market cap weighting groups cryptocurrencies by ranking them according to 

Index traders trade these instruments through derivatives products such as options, and futures. The goal of index trading is to gain broader exposure to more than one individual asset.

Proof-of-stake (PoS) blockchains use staking, instead of mining, to validate transactions. Blockchains operating on PoS reward cryptocurrency owners with staking rewards for validating transactions. This involves holding a specific amount of funds in a crypto wallet to support the security and operations of a particular blockchain network in exchange for set rewards.

Maintaining a minimum balance qualifies a wallet as a staking node. The value of the stake increases the chances that the node will be used to create the next block. If a block is created on the node, stake rewards are distributed to the validator. 

Trading in traditional financial markets shares similarities across asset classes, requiring discipline and defined strategies over the short or long term. Cryptocurrency trading is no different, and understanding various approaches offers investors frameworks to use in a competitive market.

Every trader will have a trading style and strategy that suits their individual personality and trading budget. The most successful crypto traders combine approaches while tracking their performance, changing methodologies as they gain experience. 

The more information and insight that you have regarding cryptocurrencies and cryptocurrency trading — for instance, fundamentals, analytics and trends, — the better you’ll be able to shape profitable trading strategies of your own.

A Beginner’s Guide to Cryptocurrency Trading Strategies

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