blockfarm

Blockfarm: $40,000 BTC Pool Kicks Off on Friday

Digitex
• Digitex
May 19, 2021

Last Friday, we kicked off our very first staking program through our brand-new yield farming platform Blockfarm. Users who want to earn a passive income on their crypto holdings can simply stake DGTX and earn generous rewards in various different cryptos. 

We started the program with Ether rewards, and are paying out a total of just over $30,000 worth of ETH (12 ETH) in 30 days–and now we’re stepping up the action! This Friday, we’ll be adding a Bitcoin staking program to the mix, with 1 BTC worth of rewards up for grabs (around $40,000).

If you like the idea of putting your DGTX to use by staking it to earn rewards in BTC, you can prestake now. With 48 hours to go until kickoff, you can secure your place in the queue by completing a quick KYC check and setting up your account.

Stake DGTX and Earn Your Share of 1 BTC in Rewards

Whether you’ve been actively trading or watching on in horror as the crypto markets sell off, we can help you ease the blow. All you have to do (if you haven’t already) is create an account on Digitex, purchase DGTX commission-free on our spot markets and deposit it into your main account, complete a quick KYC check on the Blockfarm platform, and then transfer your DGTX to it. 

The APY will vary depending on how many users take part but the current APY on our ETH staking program on Blockfarm is 56% with more than 114 million DGTX staked over the last few days.

Blockfarm: $40,000 BTC Pool Kicks Off on Friday 1

We’re excited to be able to bring you staking rewards in the world’s most popular cryptocurrency and we hope that you’ll take advantage of this program as well as our existing ETH staking rewards. We’ll be adding more coins to the program as they get listed on the exchange, so keep your eyes open for further details and, until then, happy staking!

May 19, 2021
Digitex

Blockfarm: $40,000 BTC Pool Kicks Off on Friday

Digitex
blockfarm

Last Friday, we kicked off our very first staking program through our brand-new yield farming platform Blockfarm. Users who want to earn a passive income on their crypto holdings can simply stake DGTX and earn generous rewards in various different cryptos. 

We started the program with Ether rewards, and are paying out a total of just over $30,000 worth of ETH (12 ETH) in 30 days–and now we’re stepping up the action! This Friday, we’ll be adding a Bitcoin staking program to the mix, with 1 BTC worth of rewards up for grabs (around $40,000).

If you like the idea of putting your DGTX to use by staking it to earn rewards in BTC, you can prestake now. With 48 hours to go until kickoff, you can secure your place in the queue by completing a quick KYC check and setting up your account.

Stake DGTX and Earn Your Share of 1 BTC in Rewards

Whether you’ve been actively trading or watching on in horror as the crypto markets sell off, we can help you ease the blow. All you have to do (if you haven’t already) is create an account on Digitex, purchase DGTX commission-free on our spot markets and deposit it into your main account, complete a quick KYC check on the Blockfarm platform, and then transfer your DGTX to it. 

The APY will vary depending on how many users take part but the current APY on our ETH staking program on Blockfarm is 56% with more than 114 million DGTX staked over the last few days.

Blockfarm: $40,000 BTC Pool Kicks Off on Friday 2

We’re excited to be able to bring you staking rewards in the world’s most popular cryptocurrency and we hope that you’ll take advantage of this program as well as our existing ETH staking rewards. We’ll be adding more coins to the program as they get listed on the exchange, so keep your eyes open for further details and, until then, happy staking!

Latest News

crypto

Review – After the Elon Musk Crypto Crash, Will Markets Go Back Up?

Digitex
• Dave Reiter

On February 8, the Bitcoin (BTC) community received incredibly bullish news when Tesla CEO, Elon Musk announced that his company had purchased $1.5 billion worth of BTC. In the same press release, Musk also revealed that the company would accept BTC as a method of payment for its Tesla automobiles. Immediately following the press release, the price of BTC exploded to the upside, gaining $6,881 (Chart #1).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 3

The announcement by Musk marked the beginning of a massive rally in Bitcoin. Over the course of the next two months, BTC increased 73%.  

Elon Musk quickly became one of the biggest supporters of the Bitcoin ecosystem. Of course, the entire crypto community was more than happy to embrace Musk as its newest member of the “family.” In addition to being CEO of Tesla, he is the wealthiest person on the planet. In fact, Tesla’s purchase of BTC was the major contributing factor to catapulting Musk ahead of Jeff Bezos as the world’s wealthiest person. Therefore, Musk was viewed as the perfect ambassador for the Bitcoin community.

Unfortunately, the happy relationship between Musk and the crypto community was short-lived. What happened? Why did Elon Musk suddenly withdraw his endorsement of the Bitcoin ecosystem? More importantly, how will this affect the future direction of Bitcoin along with the entire cryptocurrency universe? Let’s discuss the details.

Elon Musk Abruptly Changes His View on Bitcoin     

Elon Musk is one of the greatest entrepreneurs in modern American history. Musk rose to fame in the late 1990s during the internet mania, as one of the original founders of PayPal. Over the course of the past two decades, he has been responsible for creating a number of highly successful business ventures.

Musk is most famously known for his affiliation with Tesla, which was launched in July 2003. In addition to Tesla, Musk is also involved in the Boring Company and SpaceX. As mentioned, his entrepreneurial success recently turned Musk into the wealthiest person on the planet, according to Forbes Magazine.      

Over the course of the past few years, he has received an increasing amount of scrutiny from various environmental groups concerning Tesla’s commitment to producing energy-efficient vehicles. Additionally, the company’s automobile plants are closely monitored by several third parties in an effort to determine if Tesla is maintaining an eco-friendly working environment. Tesla promotes itself as an industry leader in using renewable energy to operate its manufacturing facilities. This probably explains why the company is constantly critiqued and observed by independent agencies.     

Bitcoin has come under frequent and repeated attack by a number of environmentally-friendly research groups concerning its potential damage to the environment, particularly as it relates to Bitcoin mining. These research groups claim that the Bitcoin mining process consumes a great deal of non-renewable energy and emits an ever-increasing amount of carbon into the atmosphere. They question whether Bitcoin’s damage to the environment is outweighed by its benefit as a long-term store of value. This has been an ongoing debate between Bitcoiners and environmental groups for the past few years. However, the debate has certainly intensified during the past few months.

This brings us back to Elon Musk and his endorsement of Bitcoin. Given the fact that Tesla is currently struggling with its own environmental issues, Elon and his inner circle of advisors probably determined that Tesla’s involvement with Bitcoin was a poorly-timed decision. Most likely, this explains why Musk withdrew his support of BTC as a medium of exchange.

Musk released his now-famous tweet on May 12, in which he tweeted that Tesla would no longer accept Bitcoin as a method of payment for its automobiles.

Musk cited “environmental concerns” as the reason why Tesla suspended its acceptance of Bitcoin. Immediately upon the release of Elon’s tweet, the price of BTC quickly began to roll over to the downside. By the end of the day, BTC had lost 9.5% of its value.

BTC continued to drop for the next three days, as Musk released a few additional negative comments about Bitcoin and many analysts are wondering if the bottom is in yet, after BTC briefly dove below $40,000 on May 19. So, where do we go from here? In order to answer this question, let’s examine Bitcoin based on technical analysis.

Analyzing Bitcoin Based on Technical Analysis

Bitcoin peaked @ 64,789 on April 14. During the past four weeks, BTC had dropped by more than 34% (Chart #2), only to tumble even lower below the $40,000 mark on May 19.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 4

How does this sell-off compare with declines from other bull market cycles? Let’s analyze the most recent bull market cycle from 2017. BTC generated a dramatic rally in the second half of 2017, advancing 570% from September through December. However, Bitcoin also experienced two sharp declines of 39.7% and 30.0%, respectively (Chart #3).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 5

Even though the current decline is certainly painful for the Bitcoin bulls, it is quite normal when compared to other historical downturns.

Despite the current decline, the daily chart pattern for Bitcoin continues to remain bullish. The first sign of trouble for the bulls would be a weekly close below 37,409 (Chart #4). The BTC chart pattern will turn decidedly bearish if 37,409 is penetrated on a weekly closing basis.      

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 6  

In terms of the hourly chart, the bears are in control. In order to reverse the bearish momentum, the bulls need a daily close above 59,696 (Chart #5). The most likely scenario over the course of the next few weeks is a trading range.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 7

BTC could easily remain locked in a trading range for the next several weeks. The important numbers to watch are 37,409 and 59,696.

Analyzing Ethereum Based on Technical Analysis

Although Bitcoin has garnered the majority of media attention during the past few days, Elon’s comments have wreaked havoc on the entire cryptocurrency universe. Almost all coins and tokens have suffered brutal declines. Let’s briefly review Ethereum (ETH) from a technical perspective.

Prior to the Tesla news, ETH was in the middle of a dramatic rally dating back to the pandemic low in March 2020. ETH recorded a major low on 13 March 2020 @ 89.50. The cryptocurrency preceded to rally 4,783% during the next 14 months, reaching its peak on 12 May @ 4,370.76.

The very next day, Elon Musk released his tweet concerning Tesla’s plan to stop accepting Bitcoin. Although Elon’s tweet was not aimed directly at Ethereum, it nevertheless sparked a brutal sell-off in ETH. Within 72 hours, ETH had declined 28.2% (Chart #6).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 8

In spite of the sharp decline, the Ethereum chart pattern remains persistently bullish. It would take a weekly close below 1,937 to flip the chart from bullish to bearish (Chart #7).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 9

This type of price drop is certainly possible. However, it’s highly unlikely. Going forward, ETH will most likely remain in a trading range for the next several weeks, as it consolidates the recent sharp decline.

As long as the price stays above 1,937, ETH should easily create a new all-time high above 4,370 by the end of 2021.

All Signs Point to Higher Crypto Prices

It’s very easy for crypto traders and investors to become fixated on short-term fluctuations in the crypto markets. Many traders (particularly novice traders) have a tendency to focus only on the negative crypto news while ignoring the long-term bullish outlook.

Bitcoin, Ethereum and other cryptocurrencies have received a tremendous amount of bullish news during the past several months, particularly at the institutional level. A wave of institutional money has flooded into the crypto universe during the past nine months. This is extremely bullish from a “big picture” multi-year perspective.

While it’s certainly possible that Bitcoin and other cryptocurrencies could experience another sharp leg to the downside, this won’t change the bullish outlook from a long-term global perspective. Cryptocurrencies are in the early stages of completely disrupting industries that have been in existence for hundreds of years. There will be several bumps along the way (e.g. Elon Musk’s tweets). However, investors who can tolerate the short-term volatility will be rewarded with long-term success.

 Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

May 19, 2021
Digitex

Review – After the Elon Musk Crypto Crash, Will Markets Go Back Up?

Dave Reiter
crypto

On February 8, the Bitcoin (BTC) community received incredibly bullish news when Tesla CEO, Elon Musk announced that his company had purchased $1.5 billion worth of BTC. In the same press release, Musk also revealed that the company would accept BTC as a method of payment for its Tesla automobiles. Immediately following the press release, the price of BTC exploded to the upside, gaining $6,881 (Chart #1).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 10

The announcement by Musk marked the beginning of a massive rally in Bitcoin. Over the course of the next two months, BTC increased 73%.  

Elon Musk quickly became one of the biggest supporters of the Bitcoin ecosystem. Of course, the entire crypto community was more than happy to embrace Musk as its newest member of the “family.” In addition to being CEO of Tesla, he is the wealthiest person on the planet. In fact, Tesla’s purchase of BTC was the major contributing factor to catapulting Musk ahead of Jeff Bezos as the world’s wealthiest person. Therefore, Musk was viewed as the perfect ambassador for the Bitcoin community.

Unfortunately, the happy relationship between Musk and the crypto community was short-lived. What happened? Why did Elon Musk suddenly withdraw his endorsement of the Bitcoin ecosystem? More importantly, how will this affect the future direction of Bitcoin along with the entire cryptocurrency universe? Let’s discuss the details.

Elon Musk Abruptly Changes His View on Bitcoin     

Elon Musk is one of the greatest entrepreneurs in modern American history. Musk rose to fame in the late 1990s during the internet mania, as one of the original founders of PayPal. Over the course of the past two decades, he has been responsible for creating a number of highly successful business ventures.

Musk is most famously known for his affiliation with Tesla, which was launched in July 2003. In addition to Tesla, Musk is also involved in the Boring Company and SpaceX. As mentioned, his entrepreneurial success recently turned Musk into the wealthiest person on the planet, according to Forbes Magazine.      

Over the course of the past few years, he has received an increasing amount of scrutiny from various environmental groups concerning Tesla’s commitment to producing energy-efficient vehicles. Additionally, the company’s automobile plants are closely monitored by several third parties in an effort to determine if Tesla is maintaining an eco-friendly working environment. Tesla promotes itself as an industry leader in using renewable energy to operate its manufacturing facilities. This probably explains why the company is constantly critiqued and observed by independent agencies.     

Bitcoin has come under frequent and repeated attack by a number of environmentally-friendly research groups concerning its potential damage to the environment, particularly as it relates to Bitcoin mining. These research groups claim that the Bitcoin mining process consumes a great deal of non-renewable energy and emits an ever-increasing amount of carbon into the atmosphere. They question whether Bitcoin’s damage to the environment is outweighed by its benefit as a long-term store of value. This has been an ongoing debate between Bitcoiners and environmental groups for the past few years. However, the debate has certainly intensified during the past few months.

This brings us back to Elon Musk and his endorsement of Bitcoin. Given the fact that Tesla is currently struggling with its own environmental issues, Elon and his inner circle of advisors probably determined that Tesla’s involvement with Bitcoin was a poorly-timed decision. Most likely, this explains why Musk withdrew his support of BTC as a medium of exchange.

Musk released his now-famous tweet on May 12, in which he tweeted that Tesla would no longer accept Bitcoin as a method of payment for its automobiles.

Musk cited “environmental concerns” as the reason why Tesla suspended its acceptance of Bitcoin. Immediately upon the release of Elon’s tweet, the price of BTC quickly began to roll over to the downside. By the end of the day, BTC had lost 9.5% of its value.

BTC continued to drop for the next three days, as Musk released a few additional negative comments about Bitcoin and many analysts are wondering if the bottom is in yet, after BTC briefly dove below $40,000 on May 19. So, where do we go from here? In order to answer this question, let’s examine Bitcoin based on technical analysis.

Analyzing Bitcoin Based on Technical Analysis

Bitcoin peaked @ 64,789 on April 14. During the past four weeks, BTC had dropped by more than 34% (Chart #2), only to tumble even lower below the $40,000 mark on May 19.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 11

How does this sell-off compare with declines from other bull market cycles? Let’s analyze the most recent bull market cycle from 2017. BTC generated a dramatic rally in the second half of 2017, advancing 570% from September through December. However, Bitcoin also experienced two sharp declines of 39.7% and 30.0%, respectively (Chart #3).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 12

Even though the current decline is certainly painful for the Bitcoin bulls, it is quite normal when compared to other historical downturns.

Despite the current decline, the daily chart pattern for Bitcoin continues to remain bullish. The first sign of trouble for the bulls would be a weekly close below 37,409 (Chart #4). The BTC chart pattern will turn decidedly bearish if 37,409 is penetrated on a weekly closing basis.      

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 13  

In terms of the hourly chart, the bears are in control. In order to reverse the bearish momentum, the bulls need a daily close above 59,696 (Chart #5). The most likely scenario over the course of the next few weeks is a trading range.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 14

BTC could easily remain locked in a trading range for the next several weeks. The important numbers to watch are 37,409 and 59,696.

Analyzing Ethereum Based on Technical Analysis

Although Bitcoin has garnered the majority of media attention during the past few days, Elon’s comments have wreaked havoc on the entire cryptocurrency universe. Almost all coins and tokens have suffered brutal declines. Let’s briefly review Ethereum (ETH) from a technical perspective.

Prior to the Tesla news, ETH was in the middle of a dramatic rally dating back to the pandemic low in March 2020. ETH recorded a major low on 13 March 2020 @ 89.50. The cryptocurrency preceded to rally 4,783% during the next 14 months, reaching its peak on 12 May @ 4,370.76.

The very next day, Elon Musk released his tweet concerning Tesla’s plan to stop accepting Bitcoin. Although Elon’s tweet was not aimed directly at Ethereum, it nevertheless sparked a brutal sell-off in ETH. Within 72 hours, ETH had declined 28.2% (Chart #6).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 15

In spite of the sharp decline, the Ethereum chart pattern remains persistently bullish. It would take a weekly close below 1,937 to flip the chart from bullish to bearish (Chart #7).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 16

This type of price drop is certainly possible. However, it’s highly unlikely. Going forward, ETH will most likely remain in a trading range for the next several weeks, as it consolidates the recent sharp decline.

As long as the price stays above 1,937, ETH should easily create a new all-time high above 4,370 by the end of 2021.

All Signs Point to Higher Crypto Prices

It’s very easy for crypto traders and investors to become fixated on short-term fluctuations in the crypto markets. Many traders (particularly novice traders) have a tendency to focus only on the negative crypto news while ignoring the long-term bullish outlook.

Bitcoin, Ethereum and other cryptocurrencies have received a tremendous amount of bullish news during the past several months, particularly at the institutional level. A wave of institutional money has flooded into the crypto universe during the past nine months. This is extremely bullish from a “big picture” multi-year perspective.

While it’s certainly possible that Bitcoin and other cryptocurrencies could experience another sharp leg to the downside, this won’t change the bullish outlook from a long-term global perspective. Cryptocurrencies are in the early stages of completely disrupting industries that have been in existence for hundreds of years. There will be several bumps along the way (e.g. Elon Musk’s tweets). However, investors who can tolerate the short-term volatility will be rewarded with long-term success.

 Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

trading

New Trading Video – How to Succeed Trading on Digitex

Digitex
Trading
• Digitex
May 17, 2021

Frequent winning trader on the Digitex platform CoinCollector has compiled another handy video for you. If you want to take advantage of the insane volatility surrounding the cryptocurrency markets right now, you should be trading on the only platform that lets you keep 100% of your profit. Watch as this skilled trader makes quick gains using the one-minute chart and following his simple technical rules.

Trading BTC and ETH Futures

CoinCollector first takes us through two trades he’s taken earlier, one on the BTCUSD market and the other on the ETHUSD market, to show how he makes money whether the market goes up or down. In this video, there was a lot of action going on in BTC and it hit the lower trend line four times. He says, “the more often a trend line gets hit, the more likely it will break,” and he was expecting the BTC price to take a significant turn to the downside. 

He gives us a look at candles and an explanation of wicks–and why they may or may not get filled. The wick in the video, he says, will produce a very strong price reaction, which means that there are many sellers and the price will pull back, as people close out their positions. He shows us how to draw a trend line on the screen and then wait for the price to break the trend line. Each time the trend line gets hit, it adds to his confidence that the price will continue to go down.

He also shows us a trade on the ETHUSD market, this time with the price of ETH turning bearish. However, he says that when you are trading an asset on a very short time frame, don’t forget that the price will likely go up and down, retesting after it hits the trend line. This means that when you are scalping, you must be prepared to go long and short and quickly close out your positions, giving the screen your entire attention. 

His strategy really takes advantage of scalping, of capitalizing on even the smallest of movements in the price. That’s one of the things that makes Digitex so unique. It lets you win every single minute, following the price and accumulating small profits. Even if BTC and ETH go and down and up in a zig-zag multiple times in an hour, you can profit when you follow the price–and ensure that you reduce your losses by closing out your position quickly when needed.

Live Trading

CoinCollector then shows us a session of his live trading, really putting the exchange through its paces showing what’s possible using the trendline technique to measure price targets. Despite the crypto markets tanking over the last few days, CoinCollector shows how it’s possible to make money. In fact, he made more than 500,000 DGTX in profit from shorting the price of both BTC and ETH.

You need patience and discipline, and have to be prepared to change in an instant to make sure to capture the trend. In this video, he watches to see if BTC can break out of a level and go to the upside. He also explains how to go long or short when you take into factors like resistance and support. But mainly, he really shows how fast-paced trading on the platform is. You have to be completely engaged and ready to watch the action for a “quick short scalp.”

He said, “I do not usually trade on a one-minute chart, but on Digitex you can trade on a one-minute chart thanks to the zero fees. I don’t do that on other exchanges, scalping on a one minute chart, there is no better place to go than here because zero fees saves you a ton of money.”

If your crypto holdings are hurting and you want to try your hand at scalping on the Digitex exchange with zero fees and the only trading ladder interface in crypto, be sure to sign up for an account today. We received a 4.45 out of 5 for customer service and 4.3 for the overall platform experience. Check out what else our users are saying about us here.

May 17, 2021
Digitex
Trading

New Trading Video – How to Succeed Trading on Digitex

Digitex
trading

Frequent winning trader on the Digitex platform CoinCollector has compiled another handy video for you. If you want to take advantage of the insane volatility surrounding the cryptocurrency markets right now, you should be trading on the only platform that lets you keep 100% of your profit. Watch as this skilled trader makes quick gains using the one-minute chart and following his simple technical rules.

Trading BTC and ETH Futures

CoinCollector first takes us through two trades he’s taken earlier, one on the BTCUSD market and the other on the ETHUSD market, to show how he makes money whether the market goes up or down. In this video, there was a lot of action going on in BTC and it hit the lower trend line four times. He says, “the more often a trend line gets hit, the more likely it will break,” and he was expecting the BTC price to take a significant turn to the downside. 

He gives us a look at candles and an explanation of wicks–and why they may or may not get filled. The wick in the video, he says, will produce a very strong price reaction, which means that there are many sellers and the price will pull back, as people close out their positions. He shows us how to draw a trend line on the screen and then wait for the price to break the trend line. Each time the trend line gets hit, it adds to his confidence that the price will continue to go down.

He also shows us a trade on the ETHUSD market, this time with the price of ETH turning bearish. However, he says that when you are trading an asset on a very short time frame, don’t forget that the price will likely go up and down, retesting after it hits the trend line. This means that when you are scalping, you must be prepared to go long and short and quickly close out your positions, giving the screen your entire attention. 

His strategy really takes advantage of scalping, of capitalizing on even the smallest of movements in the price. That’s one of the things that makes Digitex so unique. It lets you win every single minute, following the price and accumulating small profits. Even if BTC and ETH go and down and up in a zig-zag multiple times in an hour, you can profit when you follow the price–and ensure that you reduce your losses by closing out your position quickly when needed.

Live Trading

CoinCollector then shows us a session of his live trading, really putting the exchange through its paces showing what’s possible using the trendline technique to measure price targets. Despite the crypto markets tanking over the last few days, CoinCollector shows how it’s possible to make money. In fact, he made more than 500,000 DGTX in profit from shorting the price of both BTC and ETH.

You need patience and discipline, and have to be prepared to change in an instant to make sure to capture the trend. In this video, he watches to see if BTC can break out of a level and go to the upside. He also explains how to go long or short when you take into factors like resistance and support. But mainly, he really shows how fast-paced trading on the platform is. You have to be completely engaged and ready to watch the action for a “quick short scalp.”

He said, “I do not usually trade on a one-minute chart, but on Digitex you can trade on a one-minute chart thanks to the zero fees. I don’t do that on other exchanges, scalping on a one minute chart, there is no better place to go than here because zero fees saves you a ton of money.”

If your crypto holdings are hurting and you want to try your hand at scalping on the Digitex exchange with zero fees and the only trading ladder interface in crypto, be sure to sign up for an account today. We received a 4.45 out of 5 for customer service and 4.3 for the overall platform experience. Check out what else our users are saying about us here.

Latest News

The Role of Stablecoins in the Crypto Industry 17

The Role of Stablecoins in the Crypto Industry

Digitex
• Dave Reiter
April 27, 2021

During the past decade, several new innovative products have been created in an effort to disrupt the financial services industry. Arguably, the product that has unleashed the most disruption is stablecoins. The first stablecoin was Tether (USDT), officially launched in October 2014.

Immediately upon its introduction to the crypto industry, Tether became incredibly popular and quite useful. Since the release of Tether, over 200 stablecoins have been announced. However, the majority of these coins are still lingering in the phase of research and development (R&D). Additionally, 10% have been discontinued. Currently, 36 stablecoins are in existence with a market capitalization of $75.7 billion. Let’s examine a list of the top 5 stablecoins.

  • Tether (USDT) – $48.7 billion
  • USD Coin (USDC) – $11.3 billion
  • Binance USD (BUSD) – $5.4 billion
  • Dai – (DAI) $3.6 billion
  • TerraUSD (UST) – $1.8 billion

As you can see, Tether is clearly the leader within the stablecoin universe. In fact, Tether’s market capitalization comprises 64% of the entire industry. The top five coins represent 94% of all stablecoins. Essentially, five coins dominate the entire space.

Stablecoins Versus Traditional Cryptocurrencies

Although stablecoins share many of the same features and characteristics of cryptocurrencies, they were designed to solve some of the problems inherently rooted in cryptocurrencies. Let’s discuss the details.

When Satoshi Nakamoto launched the world’s first cryptocurrency on a decentralized ledger in January 2009, Nakamoto could not possibly have forecasted the substantial price appreciation that would transpire during the first decade of its existence. Of course, the cryptocurrency we are referring to is Bitcoin (BTC).

The dramatic increase in the value of BTC in the years following its release was both a benefit and a curse within the global crypto community. Obviously, Bitcoin’s price increase was a huge benefit because a substantial number of investors enjoyed historic rates of return. However, the extraordinary price appreciation was also a major detriment to Bitcoin investors because these price advances also included a great deal of volatility.

Many people in the crypto community were unaware that Nakamoto’s original concept for Bitcoin was a peer-to-peer payment system. In fact, the initial paragraph of the Bitcoin white paper describes “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

As you can clearly see from the white paper, Nakamoto was enamored with the idea of an electronic P2P payment system without the need for a third-party intermediary. From 2009 through 2017, the vast majority of the crypto community supported Nakamoto’s belief that Bitcoin was designed to be a payment system that would ultimately replace Visa, Mastercard, PayPal, and other payment forms as the preferred method for daily transactions.

Following the historic rally in 2017 and subsequent collapse in early-2018, Bitcoiners came to the realization that BTC was much too volatile to be used as a method of payment for daily transactions. Beginning in 2018, the Bitcoin narrative began to change from “method of payment” to “store of value.” Based on the fact that BTC had substantially outperformed gold and all other major asset classes since its inception in 2009, the best use case for Bitcoin going forward was a store of value.

Although the Bitcoin community had successfully changed the BTC narrative in 2018, they still had to deal with the fact that cryptocurrencies were inherently volatile. In order to solve this problem, stablecoins were rolled out on a large-scale basis. Stablecoins are an excellent vehicle for performing day-to-day transactions because they are simplistic, stable, scalable, and secure. Stablecoins fulfilled the role of Nakamoto’s original intent for Bitcoin, which was a peer-to-peer payment system.

Unlike cryptocurrencies, stablecoins are not prone to dramatic price fluctuations because each stablecoin is linked to a fiat currency like the US Dollar or Euro. It is collateralized by the value of the underlying asset. Additionally, each stablecoin is pegged at a 1:1 ratio with the underlying asset. This explains how stablecoins are able to maintain price stability even if other cryptocurrencies are experiencing dramatic volatility.

Types of Stablecoins

Stablecoins can be placed in four different categories. Let’s briefly review each category.

Fiat-collateralized – The vast majority of stablecoins are fiat-collateralized. This means that the stablecoins are backed by fiat currencies like US Dollar, Euro, British Pound and other fiat currencies. As we previously mentioned, stablecoins are linked at a 1:1 ratio with the underlying fiat currency. For each stablecoin in existence, fiat currency is held in a bank account as collateral. When a trader initiates a stablecoin withdrawal, the crypto exchange transfers fiat currency to the trader’s bank account and the corresponding stablecoin is taken out of the trader’s crypto account and removed from circulation.

Commodity-collateralized – As the name implies, commodity-collateralized stablecoins are supported by interchangeable assets such as commodities. The most popular asset in this category is precious metals, specifically gold. In addition to gold, other assets include silver, crude oil and even real estate. The most attractive feature of commodity-collateralized stablecoins is that the owners of these coins hold a tangible asset with real value. This is in stark contrast to other cryptocurrencies, which typically have no tangible value.

Crypto-collateralized – These stablecoins are backed 100% by other cryptocurrencies. Many crypto investors don’t support fiat-collateralized stablecoins because they are linked to the legacy financial services industry through fiat money. Instead, these investors prefer 100% decentralized stablecoins, with all transactions conducted on the blockchain. Even though crypto-collateralized stablecoins are inherently more volatile, there is a growing list of supporters who are willing to tolerate the volatility in exchange for a purely decentralized transaction.

Non-collateralized – Even though stablecoins have been in existence since 2014, very few non-collateralized stablecoins have been issued. The demand for such a coin is relatively small because it carries the greatest amount of risk among all stablecoins. Despite its inherent risk, there is a small group of crypto investors who prefer this type of stablecoin because it is the most decentralized and independent form of stablecoin. Its decentralization stems from the fact that the coin is not collateralized to any other asset. Therefore, it avoids dealing with centralized assets such as fiat money and commodities.

Use Cases for Stablecoins

Even though stablecoins have only been in existence for six years, crypto experts have discovered several different use cases. Let’s review a few of the ways stablecoins are being used within the cryptocurrency ecosystem.

Without question, the most common use case for stablecoins is the ability of crypto traders to easily transfer their funds between various crypto assets. Prior to the introduction of stablecoins, traders were unable to move their crypto assets to a safe and secure coin. Instead, they were forced to liquidate their cryptocurrencies, convert the proceeds back to a fiat currency and also remove their funds from the crypto exchange. Thanks to the introduction of stablecoins, traders have the option of liquidating their cryptocurrencies and parking the proceeds in a stablecoin. This allows all funds to remain in the cryptocurrency ecosystem. Thanks to stablecoins, traders and investors can completely avoid the fiat system.

As stablecoins continue to gain widespread acceptance, the retail community could ultimately become the biggest beneficiary. As we previously discussed, Satoshi Nakamoto’s original use case for Bitcoin was a medium of exchange for day-to-day transactions. However, the daily use of BTC never gained widespread adoption because Bitcoin was simply too volatile. Stablecoins have solved the volatility problem. Therefore, stablecoins have the potential to be used as a daily medium of exchange, finally realizing Nakamoto’s original use case for Bitcoin.

Another use case for stablecoins involves smart contracts. During the past few years, several industries have explored the idea of using smart contracts in an effort to lower their costs by removing third party intermediaries. However, companies have been reluctant to use smart contracts because the payment method usually involved a volatile cryptocurrency like Bitcoin or Ethereum. Thanks to stablecoins, several industries are reexamining the use of smart contracts because the problem of volatility has been solved.

Crypto experts believe that we are just beginning to scratch the surface in terms of how stablecoins will be used as a bridge to connect the old legacy financial services industry with a new system based on decentralized finance. Stablecoins could easily become the fastest growing sector within the cryptocurrency universe.

 

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

April 27, 2021
Digitex

The Role of Stablecoins in the Crypto Industry

Dave Reiter
The Role of Stablecoins in the Crypto Industry 18

During the past decade, several new innovative products have been created in an effort to disrupt the financial services industry. Arguably, the product that has unleashed the most disruption is stablecoins. The first stablecoin was Tether (USDT), officially launched in October 2014.

Immediately upon its introduction to the crypto industry, Tether became incredibly popular and quite useful. Since the release of Tether, over 200 stablecoins have been announced. However, the majority of these coins are still lingering in the phase of research and development (R&D). Additionally, 10% have been discontinued. Currently, 36 stablecoins are in existence with a market capitalization of $75.7 billion. Let’s examine a list of the top 5 stablecoins.

  • Tether (USDT) – $48.7 billion
  • USD Coin (USDC) – $11.3 billion
  • Binance USD (BUSD) – $5.4 billion
  • Dai – (DAI) $3.6 billion
  • TerraUSD (UST) – $1.8 billion

As you can see, Tether is clearly the leader within the stablecoin universe. In fact, Tether’s market capitalization comprises 64% of the entire industry. The top five coins represent 94% of all stablecoins. Essentially, five coins dominate the entire space.

Stablecoins Versus Traditional Cryptocurrencies

Although stablecoins share many of the same features and characteristics of cryptocurrencies, they were designed to solve some of the problems inherently rooted in cryptocurrencies. Let’s discuss the details.

When Satoshi Nakamoto launched the world’s first cryptocurrency on a decentralized ledger in January 2009, Nakamoto could not possibly have forecasted the substantial price appreciation that would transpire during the first decade of its existence. Of course, the cryptocurrency we are referring to is Bitcoin (BTC).

The dramatic increase in the value of BTC in the years following its release was both a benefit and a curse within the global crypto community. Obviously, Bitcoin’s price increase was a huge benefit because a substantial number of investors enjoyed historic rates of return. However, the extraordinary price appreciation was also a major detriment to Bitcoin investors because these price advances also included a great deal of volatility.

Many people in the crypto community were unaware that Nakamoto’s original concept for Bitcoin was a peer-to-peer payment system. In fact, the initial paragraph of the Bitcoin white paper describes “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

As you can clearly see from the white paper, Nakamoto was enamored with the idea of an electronic P2P payment system without the need for a third-party intermediary. From 2009 through 2017, the vast majority of the crypto community supported Nakamoto’s belief that Bitcoin was designed to be a payment system that would ultimately replace Visa, Mastercard, PayPal, and other payment forms as the preferred method for daily transactions.

Following the historic rally in 2017 and subsequent collapse in early-2018, Bitcoiners came to the realization that BTC was much too volatile to be used as a method of payment for daily transactions. Beginning in 2018, the Bitcoin narrative began to change from “method of payment” to “store of value.” Based on the fact that BTC had substantially outperformed gold and all other major asset classes since its inception in 2009, the best use case for Bitcoin going forward was a store of value.

Although the Bitcoin community had successfully changed the BTC narrative in 2018, they still had to deal with the fact that cryptocurrencies were inherently volatile. In order to solve this problem, stablecoins were rolled out on a large-scale basis. Stablecoins are an excellent vehicle for performing day-to-day transactions because they are simplistic, stable, scalable, and secure. Stablecoins fulfilled the role of Nakamoto’s original intent for Bitcoin, which was a peer-to-peer payment system.

Unlike cryptocurrencies, stablecoins are not prone to dramatic price fluctuations because each stablecoin is linked to a fiat currency like the US Dollar or Euro. It is collateralized by the value of the underlying asset. Additionally, each stablecoin is pegged at a 1:1 ratio with the underlying asset. This explains how stablecoins are able to maintain price stability even if other cryptocurrencies are experiencing dramatic volatility.

Types of Stablecoins

Stablecoins can be placed in four different categories. Let’s briefly review each category.

Fiat-collateralized – The vast majority of stablecoins are fiat-collateralized. This means that the stablecoins are backed by fiat currencies like US Dollar, Euro, British Pound and other fiat currencies. As we previously mentioned, stablecoins are linked at a 1:1 ratio with the underlying fiat currency. For each stablecoin in existence, fiat currency is held in a bank account as collateral. When a trader initiates a stablecoin withdrawal, the crypto exchange transfers fiat currency to the trader’s bank account and the corresponding stablecoin is taken out of the trader’s crypto account and removed from circulation.

Commodity-collateralized – As the name implies, commodity-collateralized stablecoins are supported by interchangeable assets such as commodities. The most popular asset in this category is precious metals, specifically gold. In addition to gold, other assets include silver, crude oil and even real estate. The most attractive feature of commodity-collateralized stablecoins is that the owners of these coins hold a tangible asset with real value. This is in stark contrast to other cryptocurrencies, which typically have no tangible value.

Crypto-collateralized – These stablecoins are backed 100% by other cryptocurrencies. Many crypto investors don’t support fiat-collateralized stablecoins because they are linked to the legacy financial services industry through fiat money. Instead, these investors prefer 100% decentralized stablecoins, with all transactions conducted on the blockchain. Even though crypto-collateralized stablecoins are inherently more volatile, there is a growing list of supporters who are willing to tolerate the volatility in exchange for a purely decentralized transaction.

Non-collateralized – Even though stablecoins have been in existence since 2014, very few non-collateralized stablecoins have been issued. The demand for such a coin is relatively small because it carries the greatest amount of risk among all stablecoins. Despite its inherent risk, there is a small group of crypto investors who prefer this type of stablecoin because it is the most decentralized and independent form of stablecoin. Its decentralization stems from the fact that the coin is not collateralized to any other asset. Therefore, it avoids dealing with centralized assets such as fiat money and commodities.

Use Cases for Stablecoins

Even though stablecoins have only been in existence for six years, crypto experts have discovered several different use cases. Let’s review a few of the ways stablecoins are being used within the cryptocurrency ecosystem.

Without question, the most common use case for stablecoins is the ability of crypto traders to easily transfer their funds between various crypto assets. Prior to the introduction of stablecoins, traders were unable to move their crypto assets to a safe and secure coin. Instead, they were forced to liquidate their cryptocurrencies, convert the proceeds back to a fiat currency and also remove their funds from the crypto exchange. Thanks to the introduction of stablecoins, traders have the option of liquidating their cryptocurrencies and parking the proceeds in a stablecoin. This allows all funds to remain in the cryptocurrency ecosystem. Thanks to stablecoins, traders and investors can completely avoid the fiat system.

As stablecoins continue to gain widespread acceptance, the retail community could ultimately become the biggest beneficiary. As we previously discussed, Satoshi Nakamoto’s original use case for Bitcoin was a medium of exchange for day-to-day transactions. However, the daily use of BTC never gained widespread adoption because Bitcoin was simply too volatile. Stablecoins have solved the volatility problem. Therefore, stablecoins have the potential to be used as a daily medium of exchange, finally realizing Nakamoto’s original use case for Bitcoin.

Another use case for stablecoins involves smart contracts. During the past few years, several industries have explored the idea of using smart contracts in an effort to lower their costs by removing third party intermediaries. However, companies have been reluctant to use smart contracts because the payment method usually involved a volatile cryptocurrency like Bitcoin or Ethereum. Thanks to stablecoins, several industries are reexamining the use of smart contracts because the problem of volatility has been solved.

Crypto experts believe that we are just beginning to scratch the surface in terms of how stablecoins will be used as a bridge to connect the old legacy financial services industry with a new system based on decentralized finance. Stablecoins could easily become the fastest growing sector within the cryptocurrency universe.

 

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

Crypto

What Cryptocurrencies Are Available to Buy and Sell on Digitex?

Digitex
Cryptocurrency
• Digitex
April 26, 2021

Since our mainnet launch, Digitex has operated as a Bitcoin derivatives exchange allowing users to buy and sell cryptocurrency futures contracts without any trading fees.

However, as part of Digitex’s evolution, we rolled out our spot exchange last week to provide an optimized trading experience to all traders on the platform.

As a result, you can now enjoy a zero-fee crypto trading experience for digital asset pairs on both the spot and derivatives markets.

In this upgrade, we have also expanded our list with new trading pairs, which means you can now gain exposure to more digital assets on Digitex.

We have collected all the cryptocurrencies you can trade on the next-generation Digitex trading platform in this article. Check them out below.

Bitcoin (BTC)

Rank: 1st

Market capitalization: $1.059 trillion

YTD ROI: +96.45%

Launched in 2009 by the anonymous Satoshi Nakamoto, Bitcoin is the first cryptocurrency ever created and also the largest by market cap.

Created in the aftermath of the 2007-2008 financial crisis, Bitcoin features a peer-to-peer (P2P) electronic cash system that allows users to hold, receive, and send cryptocurrency without any intermediaries, according to the original BTC whitepaper.

That said, due to its limited supply and the deflationary mechanism that cuts the newly mined BTC supply in half every four years, Bitcoin also serves as an excellent store of value.

On Digitex, you can gain exposure to both spot market and Bitcoin derivatives trading pairs:

  • DGTX/BTC (spot)
  • ETH/BTC (spot)
  • BTC/USDC (spot)
  • BTC/USD (futures)

Ethereum (ETH)

Rank: 2nd

Market capitalization: $257 billion

YTD ROI: +201.87%

Launched in July 2015, Ethereum has introduced smart contracts – self-executing digital agreements between two or more parties – to the digital asset industry.

As a result, developers can program, deploy, and run their own decentralized applications (DApps) as well as create tokens and launch Initial Coin Offerings (ICOs) on top of the Ethereum blockchain.

For these reasons, Ethereum has been among the most active blockchain networks on the market that facilitated the ICO, decentralized finance (DeFi), and non-fungible token (NFT) booms.

You can trade ETH via the following trading pairs on Digitex:

  • DGTX/ETH (spot)
  • ETH/BTC (spot)
  • ETH/USDC (spot)
  • ETH/USD (futures)

USDC

Rank: 15th

Market capitalization: $11.3 billion

USDC is a stablecoin with a 1:1 peg to the USD’s value.

For that reason, while non-stablecoin cryptocurrencies often experience high levels of volatility with extreme price swings, USDC is able to maintain a relatively stable value.

This allows USDC to retain most of the benefits of cryptocurrencies – such as P2P transfers, cost-efficient fees, and fast transactions – while offering users the ability to trade digital asset pairs without exchanging their funds into fiat currencies.

Launched as the project of the global technology firm Circle, USDC quickly became the second-largest stablecoin by market capitalization just after Tether (USDT).

Digitex offers users the following USDC-based trading pairs on its platform:

  • DGTX/USDC (spot)
  • BTC/USDC (spot)
  • ETH/USDC (spot)

DGTX

Rank: 883rd

Market capitalization: $16.4 million

YTD ROI: +63.28%

DGTX is the native exchange token of the revolutionary crypto trading platform Digitex.

Since raising $5.2 million in 17 minutes during the Digitex token sale in January 2018, DGTX has played a vital role in our ecosystem.

DGTX is the cryptocurrency that allows our users to benefit from zero-fee crypto trading while powering the Digitex liquidity mining and DGTX rewards programs, which both offer traders new ways to earn crypto.

Thanks to our new spot exchange, you can now buy and sell DGTX without using third-party services. We offer traders the following DGTX trading pairs on Digitex:

  • DGTX/BTC (spot)
  • DGTX/ETH (spot)
  • DGTX/USDC (spot)

Enjoy Commission-Free Crypto Trading on Digitex

By introducing our new spot exchange, Digitex users can now trade an increased number of cryptocurrency pairs without any fees.

In addition to the ones currently offered on the exchange platform, we will be gradually adding new trading pairs based on demand and user feedback.

In the meantime, be sure to test your crypto trading strategies on the Digitex spot market.

And don’t forget to grab some DGTX instantly for USDC, ETH, or BTC via our digital asset exchange platform.

April 26, 2021
Digitex
Cryptocurrency

What Cryptocurrencies Are Available to Buy and Sell on Digitex?

Digitex
Crypto

Since our mainnet launch, Digitex has operated as a Bitcoin derivatives exchange allowing users to buy and sell cryptocurrency futures contracts without any trading fees.

However, as part of Digitex’s evolution, we rolled out our spot exchange last week to provide an optimized trading experience to all traders on the platform.

As a result, you can now enjoy a zero-fee crypto trading experience for digital asset pairs on both the spot and derivatives markets.

In this upgrade, we have also expanded our list with new trading pairs, which means you can now gain exposure to more digital assets on Digitex.

We have collected all the cryptocurrencies you can trade on the next-generation Digitex trading platform in this article. Check them out below.

Bitcoin (BTC)

Rank: 1st

Market capitalization: $1.059 trillion

YTD ROI: +96.45%

Launched in 2009 by the anonymous Satoshi Nakamoto, Bitcoin is the first cryptocurrency ever created and also the largest by market cap.

Created in the aftermath of the 2007-2008 financial crisis, Bitcoin features a peer-to-peer (P2P) electronic cash system that allows users to hold, receive, and send cryptocurrency without any intermediaries, according to the original BTC whitepaper.

That said, due to its limited supply and the deflationary mechanism that cuts the newly mined BTC supply in half every four years, Bitcoin also serves as an excellent store of value.

On Digitex, you can gain exposure to both spot market and Bitcoin derivatives trading pairs:

  • DGTX/BTC (spot)
  • ETH/BTC (spot)
  • BTC/USDC (spot)
  • BTC/USD (futures)

Ethereum (ETH)

Rank: 2nd

Market capitalization: $257 billion

YTD ROI: +201.87%

Launched in July 2015, Ethereum has introduced smart contracts – self-executing digital agreements between two or more parties – to the digital asset industry.

As a result, developers can program, deploy, and run their own decentralized applications (DApps) as well as create tokens and launch Initial Coin Offerings (ICOs) on top of the Ethereum blockchain.

For these reasons, Ethereum has been among the most active blockchain networks on the market that facilitated the ICO, decentralized finance (DeFi), and non-fungible token (NFT) booms.

You can trade ETH via the following trading pairs on Digitex:

  • DGTX/ETH (spot)
  • ETH/BTC (spot)
  • ETH/USDC (spot)
  • ETH/USD (futures)

USDC

Rank: 15th

Market capitalization: $11.3 billion

USDC is a stablecoin with a 1:1 peg to the USD’s value.

For that reason, while non-stablecoin cryptocurrencies often experience high levels of volatility with extreme price swings, USDC is able to maintain a relatively stable value.

This allows USDC to retain most of the benefits of cryptocurrencies – such as P2P transfers, cost-efficient fees, and fast transactions – while offering users the ability to trade digital asset pairs without exchanging their funds into fiat currencies.

Launched as the project of the global technology firm Circle, USDC quickly became the second-largest stablecoin by market capitalization just after Tether (USDT).

Digitex offers users the following USDC-based trading pairs on its platform:

  • DGTX/USDC (spot)
  • BTC/USDC (spot)
  • ETH/USDC (spot)

DGTX

Rank: 883rd

Market capitalization: $16.4 million

YTD ROI: +63.28%

DGTX is the native exchange token of the revolutionary crypto trading platform Digitex.

Since raising $5.2 million in 17 minutes during the Digitex token sale in January 2018, DGTX has played a vital role in our ecosystem.

DGTX is the cryptocurrency that allows our users to benefit from zero-fee crypto trading while powering the Digitex liquidity mining and DGTX rewards programs, which both offer traders new ways to earn crypto.

Thanks to our new spot exchange, you can now buy and sell DGTX without using third-party services. We offer traders the following DGTX trading pairs on Digitex:

  • DGTX/BTC (spot)
  • DGTX/ETH (spot)
  • DGTX/USDC (spot)

Enjoy Commission-Free Crypto Trading on Digitex

By introducing our new spot exchange, Digitex users can now trade an increased number of cryptocurrency pairs without any fees.

In addition to the ones currently offered on the exchange platform, we will be gradually adding new trading pairs based on demand and user feedback.

In the meantime, be sure to test your crypto trading strategies on the Digitex spot market.

And don’t forget to grab some DGTX instantly for USDC, ETH, or BTC via our digital asset exchange platform.

Latest News

How Does Zero-Fee Crypto Trading Impact Your ROI? 19

How Does Zero-Fee Crypto Trading Impact Your ROI?

Trading
• Digitex

Nearly all cryptocurrency exchanges on the market charge fees for each trade on their platform to keep their business profitable.

While it’s a viable business model used by many brokers in the traditional finance industry, trading costs hurt the profitability of traders even when they seem very low.

For that reason, the next-generation cryptocurrency exchange Digitex has entirely eliminated trading costs on its platform to offer a zero-fee experience for its traders both on the spot and Bitcoin derivatives markets.

In this article, we will show how zero-fee trading impacts our users’ ROI.

More Profits Per Trade

All types of trading fees – such as spreads and commissions – take away a portion of your hard-earned profits.

For example, suppose a cryptocurrency exchange charges 0.15% per trade. In that case, it will take 0.15% from your initial amount when you open a trade, and you will pay another 0.15% after the value your order gets filled at when exiting your position.

While the initial 0.15% hurts your chances of winning trades (more on this later), the second fee takes away a part of your profits (or increases your losses if your ROI is in the negative).

In reality, this works out as follows:

  • You enter and exit 100 positions to trade one BTC futures contract for $1,000 each time, from which you win 60 and lose 40
  • You make a $30 profit on each of your winning trades ($1,800 in total)
  • You lose $20 on the other 40 trades ($800)

As a result, your gross profit equals $1,000. However, since the crypto exchange charges a 0.15% fee on each of your trades, your net profits will decrease to $848.50 ($1000 – $1,545 x 60 + $1.47 x 40).

While a 0.15% fee doesn’t seem like much at first, the exchange ate over 15% of your profits in the above example, which effectively decreases your ROI. Imagine if you were using leverage! That fee would also be increased proportionally as well, which is a huge chunk of your profit.

On the other hand, if you trade on Digitex with zero fees, you will keep 100% of your gains, which would save you $151.50.

Moreover, in the above example, we didn’t even take compound interest into account, which is a powerful financial technique investor legend Warren Buffet used to achieve success on the market.

By compounding interest, you continuously reinvest your trading profits to generate an even better ROI in the long run.

Increased Chances of Winning Trades

In addition to making more profits, zero-fee trading also improves your chances of scoring winning trades.

Since Digitex doesn’t impose a fee when you enter a new position (and won’t be charging any other costs at all), you will start every trade with a 50-50% chance of winning or losing.

For example, as part of your crypto trading strategy, you will exit profitable trades after Bitcoin’s price goes up 1%.

On the other hand, you place a stop-loss order for each of your positions, which will automatically get triggered after the BTC price decreases by 1%.

Say there’s always a 50% chance that the BTC price will surge by at least 1% and also a 50% chance that it will move down by a minimum of 1% with every additional 0.1% gains or losses decreasing the probability by 2%.

On a zero-fee crypto trading platform, this would look like the following:

Realized Profit and Loss (minimum) Probability
+1.1% 48%
+1% 50%
-1% 50%
-1.1% 48%

As you can see, since there are no costs involved, the trader has a real 50% chance to win or lose trades in the above example.

Now, let’s see how this would work out on a digital asset exchange where traders enter every trade with a 0.1% loss due to trading costs.

Realized Profit and Loss (minimum) Probability
+1.1% 46%
+1% 48%
+0.9% 50%
-0.9% 54%
-1% 52%
-1.1% 50%

Since you paid 0.1% to the exchange for entering the position and started with a loss, your odds of scoring a winning trade have decreased to 48%, while the chances for losing one increased to 52%.

And this leads to an even worse scenario if you use a high-frequency crypto trading strategy like scalping, where you aim to take even smaller profits than in the above examples.

Let’s say that you seek to make a profit of 0.2% while triggering a stop-loss each time your realized PnL decreases by 0.2%. Like in the above example, you would have the same 50-50% chance of winning/losing at a zero-fee platform like Digitex with scalping.

On the other hand, you would face serious losses on a crypto exchange that takes a 0.1% cut from traders:

Realized Profit and Loss (minimum) Probability
+0.2% 30%
+0.15% 40%
+0.1% 50%
-0.1% 90%
-0.15% 80%
-0.2% 70%
-0.25% 60%
-0.3% 50%

As you can see from the table above, a 0.1% trading fee would lead to only a 30% chance of winning trades.

For that reason, since the risk/reward ratio was 1:1 in our example, trading at a crypto exchange with such costs will result in serious losses with this crypto trading strategy.

Supercharge Your ROI With Zero-Fee Trading at Digitex

By now, it has become clear that zero-fee trading is an excellent way to boost your ROI on the cryptocurrency market.

Eliminating trading costs not only leads to scoring more profits on your trades but also increases your chances of winning them.

Are you ready to supercharge your ROI while enjoying a zero-fee trading experience on both the crypto spot and futures markets?

Sign up for an account at Digitex now!

April 26, 2021
Trading

How Does Zero-Fee Crypto Trading Impact Your ROI?

Digitex
How Does Zero-Fee Crypto Trading Impact Your ROI? 20

Nearly all cryptocurrency exchanges on the market charge fees for each trade on their platform to keep their business profitable.

While it’s a viable business model used by many brokers in the traditional finance industry, trading costs hurt the profitability of traders even when they seem very low.

For that reason, the next-generation cryptocurrency exchange Digitex has entirely eliminated trading costs on its platform to offer a zero-fee experience for its traders both on the spot and Bitcoin derivatives markets.

In this article, we will show how zero-fee trading impacts our users’ ROI.

More Profits Per Trade

All types of trading fees – such as spreads and commissions – take away a portion of your hard-earned profits.

For example, suppose a cryptocurrency exchange charges 0.15% per trade. In that case, it will take 0.15% from your initial amount when you open a trade, and you will pay another 0.15% after the value your order gets filled at when exiting your position.

While the initial 0.15% hurts your chances of winning trades (more on this later), the second fee takes away a part of your profits (or increases your losses if your ROI is in the negative).

In reality, this works out as follows:

  • You enter and exit 100 positions to trade one BTC futures contract for $1,000 each time, from which you win 60 and lose 40
  • You make a $30 profit on each of your winning trades ($1,800 in total)
  • You lose $20 on the other 40 trades ($800)

As a result, your gross profit equals $1,000. However, since the crypto exchange charges a 0.15% fee on each of your trades, your net profits will decrease to $848.50 ($1000 – $1,545 x 60 + $1.47 x 40).

While a 0.15% fee doesn’t seem like much at first, the exchange ate over 15% of your profits in the above example, which effectively decreases your ROI. Imagine if you were using leverage! That fee would also be increased proportionally as well, which is a huge chunk of your profit.

On the other hand, if you trade on Digitex with zero fees, you will keep 100% of your gains, which would save you $151.50.

Moreover, in the above example, we didn’t even take compound interest into account, which is a powerful financial technique investor legend Warren Buffet used to achieve success on the market.

By compounding interest, you continuously reinvest your trading profits to generate an even better ROI in the long run.

Increased Chances of Winning Trades

In addition to making more profits, zero-fee trading also improves your chances of scoring winning trades.

Since Digitex doesn’t impose a fee when you enter a new position (and won’t be charging any other costs at all), you will start every trade with a 50-50% chance of winning or losing.

For example, as part of your crypto trading strategy, you will exit profitable trades after Bitcoin’s price goes up 1%.

On the other hand, you place a stop-loss order for each of your positions, which will automatically get triggered after the BTC price decreases by 1%.

Say there’s always a 50% chance that the BTC price will surge by at least 1% and also a 50% chance that it will move down by a minimum of 1% with every additional 0.1% gains or losses decreasing the probability by 2%.

On a zero-fee crypto trading platform, this would look like the following:

Realized Profit and Loss (minimum) Probability
+1.1% 48%
+1% 50%
-1% 50%
-1.1% 48%

As you can see, since there are no costs involved, the trader has a real 50% chance to win or lose trades in the above example.

Now, let’s see how this would work out on a digital asset exchange where traders enter every trade with a 0.1% loss due to trading costs.

Realized Profit and Loss (minimum) Probability
+1.1% 46%
+1% 48%
+0.9% 50%
-0.9% 54%
-1% 52%
-1.1% 50%

Since you paid 0.1% to the exchange for entering the position and started with a loss, your odds of scoring a winning trade have decreased to 48%, while the chances for losing one increased to 52%.

And this leads to an even worse scenario if you use a high-frequency crypto trading strategy like scalping, where you aim to take even smaller profits than in the above examples.

Let’s say that you seek to make a profit of 0.2% while triggering a stop-loss each time your realized PnL decreases by 0.2%. Like in the above example, you would have the same 50-50% chance of winning/losing at a zero-fee platform like Digitex with scalping.

On the other hand, you would face serious losses on a crypto exchange that takes a 0.1% cut from traders:

Realized Profit and Loss (minimum) Probability
+0.2% 30%
+0.15% 40%
+0.1% 50%
-0.1% 90%
-0.15% 80%
-0.2% 70%
-0.25% 60%
-0.3% 50%

As you can see from the table above, a 0.1% trading fee would lead to only a 30% chance of winning trades.

For that reason, since the risk/reward ratio was 1:1 in our example, trading at a crypto exchange with such costs will result in serious losses with this crypto trading strategy.

Supercharge Your ROI With Zero-Fee Trading at Digitex

By now, it has become clear that zero-fee trading is an excellent way to boost your ROI on the cryptocurrency market.

Eliminating trading costs not only leads to scoring more profits on your trades but also increases your chances of winning them.

Are you ready to supercharge your ROI while enjoying a zero-fee trading experience on both the crypto spot and futures markets?

Sign up for an account at Digitex now!

Latest News

cryptocurrency

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange?

Digitex
• Digitex
April 23, 2021

As you may already know, we shared some awesome news last week about the launch of our new spot crypto exchange.

Introducing six new trading pairs, the spot exchange offers users the ability to buy, hold, and sell cryptocurrencies without using a third-party platform.

This also applies to the native exchange token DGTX, which you can now buy with ETH, BTC, or USDC directly on Digitex.

In this article, we will guide you through all the steps you need to take to trade cryptocurrency on the Digitex spot exchange.

How to Trade Cryptocurrency on the Digitex Spot Exchange (a Step-by-Step Guide)

Step 1: Create an Account

The first step to start trading crypto on the Digitex spot exchange is to create an account on the platform.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 21

To do that, head to the official website of the cryptocurrency exchange and click either the “Create Account” or the “Sign Up” button near the top right corner of the page.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 22

On the next page, fill in the form with your email and password as well as tick the two boxes to agree to the terms of use, and confirm that you are not a U.S. citizen.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 23

As the final step, Digitex sends a code to your email address, which you have to enter to verify your email.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 24

In exchange for confirming your identity, Digitex offers $25 in DGTX, which you can use to kickstart your trading journey on the cryptocurrency exchange. However, you need to hurry as the promotion is available only for a limited time!

In addition to KYC, we highly recommend enhancing your account’s security by turning on 2-Factor-Authentication (2FA) in the “Account” menu.

After initiating the setup, download the Google Authenticator app on your smartphone, scan the QR code, and type in the code you see on your other device where you have opened the Digitex platform.

Optionally, you can pass a super quick KYC verification by clicking the profile image icon in the top right corner of the page and heading to the “Account” menu.

Step 2: Deposit Funds

You need to deposit funds into your account to start trading on the Digitex spot exchange.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 25

To do so, click the blue “Deposit” button near the top right corner of the page.

After selecting the cryptocurrency (BTC, USDC, ETH, or DGTX), Digitex will show you an ERC-20 address where you have to deposit the digital assets.

Open your (external) crypto wallet, and either copy-paste or use your phone’s camera to scan the QR code of your Digitex address.

Upon ensuring that you send the right cryptocurrency to the correct address, select the amount to transfer, and execute the transaction.

After reaching the necessary network confirmations, your funds will be automatically credited to your Digitex account.

Step 3: Place a Trade

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 26

To start trading, head into the “Wallet” menu and click on the “Transfer” button.

Select the cryptocurrency and the amount to transfer from your main account to your trading account, and click the “Confirm” button when you are ready.

Digitex will automatically move your coins to your trading account so you can start buying and selling cryptocurrency on the platform.

As the next step, select a spot trading pair (e.g., DGTX/USDC) from the top menu.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 27

When you are on the trading page, scroll down to place either a limit or a market order to buy DGTX or any other cryptocurrency available on the Digitex spot exchange.

For market orders, choose the amount of digital assets to purchase – you also need to select the price as well as the type of the order (e.g., Good till canceled) for limit orders – and execute the trade.

Spot Exchange: Digitex’s Next Step in Evolution

Congratulations, you have made your first trade on the Digitex spot exchange!

Be sure to check out Digitex’s futures trading pairs as well to trade Ethereum and Bitcoin derivatives with zero fees and up to 100x leverage.

It’s important to mention that while you don’t need to hold DGTX on the spot exchange, you can only trade futures contracts on Digitex by owning DGTX.

However, with the new spot exchange, it’s easier than ever to buy DGTX, which you can do so now by heading to the following page.

April 23, 2021
Digitex

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange?

Digitex
cryptocurrency

As you may already know, we shared some awesome news last week about the launch of our new spot crypto exchange.

Introducing six new trading pairs, the spot exchange offers users the ability to buy, hold, and sell cryptocurrencies without using a third-party platform.

This also applies to the native exchange token DGTX, which you can now buy with ETH, BTC, or USDC directly on Digitex.

In this article, we will guide you through all the steps you need to take to trade cryptocurrency on the Digitex spot exchange.

How to Trade Cryptocurrency on the Digitex Spot Exchange (a Step-by-Step Guide)

Step 1: Create an Account

The first step to start trading crypto on the Digitex spot exchange is to create an account on the platform.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 28

To do that, head to the official website of the cryptocurrency exchange and click either the “Create Account” or the “Sign Up” button near the top right corner of the page.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 29

On the next page, fill in the form with your email and password as well as tick the two boxes to agree to the terms of use, and confirm that you are not a U.S. citizen.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 30

As the final step, Digitex sends a code to your email address, which you have to enter to verify your email.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 31

In exchange for confirming your identity, Digitex offers $25 in DGTX, which you can use to kickstart your trading journey on the cryptocurrency exchange. However, you need to hurry as the promotion is available only for a limited time!

In addition to KYC, we highly recommend enhancing your account’s security by turning on 2-Factor-Authentication (2FA) in the “Account” menu.

After initiating the setup, download the Google Authenticator app on your smartphone, scan the QR code, and type in the code you see on your other device where you have opened the Digitex platform.

Optionally, you can pass a super quick KYC verification by clicking the profile image icon in the top right corner of the page and heading to the “Account” menu.

Step 2: Deposit Funds

You need to deposit funds into your account to start trading on the Digitex spot exchange.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 32

To do so, click the blue “Deposit” button near the top right corner of the page.

After selecting the cryptocurrency (BTC, USDC, ETH, or DGTX), Digitex will show you an ERC-20 address where you have to deposit the digital assets.

Open your (external) crypto wallet, and either copy-paste or use your phone’s camera to scan the QR code of your Digitex address.

Upon ensuring that you send the right cryptocurrency to the correct address, select the amount to transfer, and execute the transaction.

After reaching the necessary network confirmations, your funds will be automatically credited to your Digitex account.

Step 3: Place a Trade

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 33

To start trading, head into the “Wallet” menu and click on the “Transfer” button.

Select the cryptocurrency and the amount to transfer from your main account to your trading account, and click the “Confirm” button when you are ready.

Digitex will automatically move your coins to your trading account so you can start buying and selling cryptocurrency on the platform.

As the next step, select a spot trading pair (e.g., DGTX/USDC) from the top menu.

How to Place a Trade on the Digitex Cryptocurrency Spot Exchange? 34

When you are on the trading page, scroll down to place either a limit or a market order to buy DGTX or any other cryptocurrency available on the Digitex spot exchange.

For market orders, choose the amount of digital assets to purchase – you also need to select the price as well as the type of the order (e.g., Good till canceled) for limit orders – and execute the trade.

Spot Exchange: Digitex’s Next Step in Evolution

Congratulations, you have made your first trade on the Digitex spot exchange!

Be sure to check out Digitex’s futures trading pairs as well to trade Ethereum and Bitcoin derivatives with zero fees and up to 100x leverage.

It’s important to mention that while you don’t need to hold DGTX on the spot exchange, you can only trade futures contracts on Digitex by owning DGTX.

However, with the new spot exchange, it’s easier than ever to buy DGTX, which you can do so now by heading to the following page.

Latest News

Should You Invest in a Bitcoin ETF? 35

Should You Invest in a Bitcoin ETF?

Digitex Futures
Digitex
• Dave Reiter
April 22, 2021

The global investment community was introduced to exchange-traded funds (ETFs) on January 22, 1993, when State Street Global Advisors launched the SPDR S&P 500 ETF. It was designed to track the daily performance of the S&P 500 stock index. The State Street ETF immediately became a popular product among individual and institutional investors because it provided a low-cost approach to portfolio diversification.

Today, 28 years after its launch date, SPY remains one of the most heavily traded investment vehicles within the global financial services industry. It’s not uncommon for daily volume to exceed 100 million shares.

ETFs Gain Popularity Following the Dotcom Crash

During the past three decades, ETFs have exploded in popularity. However, they certainly did not become an overnight sensation. For the first 10 years of their existence, investors basically ignored ETFs because the industry did a poor job of marketing their products and communicating the benefits of owning exchange-traded funds.

Despite the fact that stocks had experienced a roaring bull market throughout the decade of the 1990s, most investors lost money by aggressively speculating in the “high flying” internet stocks. Therefore, by the early-2000s, investors were searching for a low-cost, diversified method for participating in the stock market. ETFs were the perfect solution.

In 2003, the size of the global ETF industry was USD $204.3 billion. Investments in ETFs have exploded during the past 18 years. In fact, with the exception of 2008, the value of exchange-traded funds has increased every year since 2003. In 2010, the ETF asset class reached its first major milestone by exceeding USD $1 trillion in market capitalization.

As you can see from the following table, investors have been pouring money into ETFs during the past decade. In fact, since 2010, the asset class has expanded by 489%. By 2023, the global market capitalization of exchange-traded funds is projected to be USD $12.0 trillion, making it one of the fastest-growing investment vehicles of all time. These numbers are based on data provided by Statista.

  • 2010 – USD $1.313 trillion
  • 2013 – USD $2.283 trillion
  • 2015 – USD $3.423 trillion
  • 2017 – USD $4.690 trillion
  • 2019 – USD $6.194 trillion
  • 2020 – USD $7.736 trillion

ETFs Viewed Through the Lens of Technological Innovation

For the past several decades, the financial services industry has been constantly criticized for its lack of innovation, particularly as it relates to technology. The industry has always been behind the curve in regard to technological innovation. In fact, technology improvements were practically non-existent for the majority of the 20th century.

However, in 1992, one of the most disruptive innovations in the history of financial services was unveiled when E*Trade introduced online trading. This new financial technology introduced millions of first-time traders to the stock market. For example, in 1995, only 300,000 investors in the United States had an online brokerage account. Five years later, in 2000, 11.3 million traders were participating in online trading. This represents a dramatic increase of 3,667%.

Is it simply a coincidence that exchange-traded funds were introduced to the investing public at precisely the same time as online trading? The short answer is, “no.” It’s not uncommon for innovative solutions to arrive in waves or clusters. An important new discovery (like online trading) usually lays the groundwork for other innovators to roll out new trailblazing technology (like ETFs).

In terms of its impact on the financial services industry, ETFs will go down in the history books as one of the most disruptive forces in comparison to other major industry groups. Please review the following list taken from data provided by the U.S. Census Bureau, Statista, BlackRock, and the International Federation of Robotics.

Annual Technology Adoption Rate Since 2009 (CAGR):

  • Smartphones – 24.3%
  • ETFs – 18.0%
  • Social media – 13.0%
  • Retail sales via e-commerce – 11.8%
  • Industrial robots – 10.9%

When most people view this list for the first time, they are shocked to discover how impactful ETFs have been on the financial services industry compared to major innovations across other industry groups. Exchange-traded funds have easily been one of the most disruptive forces of the past 50 years.

Two Disruptive Technologies Join Forces: Bitcoin and ETFs

Bitcoin was launched by Satoshi Nakamoto on January 3, 2009. The early years of Bitcoin (BTC) were very similar to exchange-traded funds. Investors were not the least bit interested in learning about the benefits of owning BTC, which is exactly the same type of reception received by ETFs. It’s not uncommon for people to ignore new discoveries, particularly technological discoveries.

As a general rule, people prefer to avoid disruptive innovations because they don’t like daily changes to their routine. This explains why it takes several years for some of the best discoveries to reach mainstream adoption.

As we previously mentioned, ETFs exploded in popularity beginning in the early-2000s, as investors discovered the benefits of owning exchange-traded funds. It took 17 years for ETFs to reach USD $1 trillion in market capitalization. Bitcoin achieved the same level in 12 years. In fact, BTC became the fastest asset class to reach USD $1 trillion in market capitalization. Most likely, Bitcoin will eventually exceed the asset level of ETFs, which currently stands at approximately USD $8 trillion.

During the past few years, several investment firms have attempted to gain regulatory approval for a Bitcoin ETF. In the United States, the Securities and Exchange Commission (SEC) has not yet approved any Bitcoin ETF application.

However, Canadian regulators provided clearance to Purpose Investments Inc by allowing the investment company to become the world’s first Bitcoin ETF. The official launch date was February 18, 2021. Although the Bitcoin ETF has only been in existence for two months, it has attracted a substantial number of new investors. Recently, Purpose Investments announced that its Bitcoin ETF exceeded USD $1 billion of assets under management. Most likely, this trend will continue as United States investors patiently wait for the SEC to approve a Bitcoin ETF.

Why are Bitcoin ETFs so highly anticipated within the global investment community? Because both of these innovative products provide investors with an opportunity to own a completely new asset class by using a low-cost vehicle like an ETF. Let’s briefly review a few of the main features and characteristics of an ETF.

Low cost

In comparison to mutual funds, exchange-traded funds are much cheaper in terms of the fees investors are required to pay. For example, a typical mutual fund charges a wide variety of fees. The list includes management fees, 12b-1 fee, administrative fees, operating fees, trading fees, auditing fees, and legal fees. The list of fees is endless.

All of these mutual fund fees are added together to create an expense ratio, which represents the total cost paid by the investor to own shares of the mutual fund. It’s not uncommon for investors to pay 1.5% to 2.0% annually. The fees are even higher if the investor uses a financial advisor.

ETFs offer some of the lowest fees in the financial services industry. The average annual ETF fee is 0.4%. Many exchange-traded funds are lower than 0.4%. In fact, many ETFs to charge less than 0.1%. This explains why investors have moved a substantial portion of their investment dollars into ETFs during the past 20 years.

Liquidity

As we previously discussed, the dollar value of ETFs has increased substantially during the past decade. The current value of assets invested in ETFs is approximately USD $8 trillion. This provides investors with a tremendous amount of liquidity to buy and sell without affecting the price of the underlying ETF. The bid/ask spread for the average ETF is very tight because of liquidity.

Accessibility

Exchange-traded funds are available on many stock exchanges across the world. ETFs trade in the same format as stocks. They are quoted on a per share basis and can be bought or sold throughout each trading day. In terms of user experience, trading an ETF is exactly the same as trading a stock.

Transparency

Over the course of the past 20 years, the financial services industry has introduced a wide variety of new investment products to the global investment community. The majority of these products were released prior to the 2008 Global Financial Crisis.

Unfortunately, many individual investors, large institutions, and public pension plans found themselves locked in these opaque and highly complex investment products. When the financial markets began to unravel in late-2008, it became impossible for investors to liquidate their positions. Of course, this only exacerbated the financial crisis.

The financial crisis taught many investors to avoid highly sophisticated investments. This explains why there has been a large increase in ETF activity since 2009. ETFs are one of the most transparent investment products within the financial services industry because ETF providers openly communicate important information to investors in terms of how these products are structured. Consequently, investors have a much better experience participating in ETFs compared to other financial products.

Diversification

Exchange-traded funds are an excellent choice for investors who are attempting to diversify their portfolios. Unlike individual stocks or bonds, ETFs provide investors with the opportunity to select various sectors, industry groups, and geographic locations.

As of 2020, the total number of listed ETFs in the United States was 2,445. Investors can select from a number of different categories: stocks, bonds, commodities, currencies, real estate, and alternative assets. These various categories provide investors with a tremendous amount of diversification. This data is provided by ETF Database.

As you can see, exchange-traded funds provide investors with several excellent features. These features and characteristics are the main reason why investors find Bitcoin ETFs so attractive. It will be a low-cost way for investors to gain exposure to BTC. Due to regulatory constraints, many investors have been unable to purchase BTC through a traditional brokerage account. Therefore, Bitcoin ETFs will allow these investors to purchase BTC for the first time.

GBTC Is Not a Bitcoin ETF

In September 2013, Grayscale Investments launched the Grayscale Bitcoin Trust, which allowed accredited investors to gain exposure to BTC through a private placement offering. The minimum investment was USD $50,000. While this product is still actively managed, it is no longer accepting new investors.

In May 2015, Grayscale received approval from the Financial Industry Regulatory Authority (FINRA) to allow shares of the Grayscale Bitcoin Trust to trade publicly on the over-the-counter (OTC) market, using the ticker symbol GBTC. This allowed individual investors to buy and sell shares of GBTC through a traditional brokerage account.

During the past six years, GBTC has become an incredibly popular product within the Bitcoin community. Prior to the launch of Purpose Investments’ Bitcoin ETF in February, GBTC was the only way to invest in Bitcoin without purchasing BTC through a crypto brokerage account. GBTC exploded in popularity during the 2017 BTC bull market. In late-2020, GBTC experienced another wave of new money, as Bitcoin enjoyed a dramatic rally. As of March 31, GBTC has USD $45.6 billion of assets under management, making it one of the most popular investment products within the financial services industry.

Despite its popularity, many investors are under the impression that GBTC is an ETF. This is not true. Even though it trades on a regulated exchange like other ETFs, GBTC is officially an exchange-traded note (ETN). Essentially, an ETN is an unsecured debt instrument issued by a financial institution. In the case of GBTC, Grayscale Investments created the Grayscale Bitcoin Trust for the purpose of issuing the ETN.

Exchange-traded notes are designed to track an underlying index or security. In terms of GBTC, the underlying security is Bitcoin. When an investor buys GBTC, Grayscale purchases an equal amount of Bitcoin. The investor does not own the BTC. Instead, the BTC is held by Grayscale in the name of the trust.

Grayscale Bitcoin Trust was legally established as an investment trust, which means that the trust is a closed-end fund. The distinguishing characteristic of a closed-end fund is that it issues a limited number of shares when a new product is launched, like the Grayscale Bitcoin Trust. Therefore, GBTC has a limited number of shares that trade on the OTC exchange. These shares can trade at a discount or a premium to the underlying security, which is Bitcoin.

Consequently, it’s not uncommon for the share price of GBTC to trade in the opposite direction of Bitcoin. There are days when the price of Bitcoin rises while the share price of GBTC declines.

ETFs are a much better product because they are not structured like GBTC. Additionally, ETF fees are substantially lower compared to ETN fees. For example, the annual management fee for GBTC is 2.0%. As you know from our previous discussions, the average ETF fee is substantially lower than 2.0%.

Overall, a Bitcoin ETF is a much better product than GBTC. This explains why many investors are waiting to invest in Bitcoin until an ETF is launched in the United States. Most likely, Bitcoin ETFs will go down in the history books as one of the greatest investment products of the 21st century.

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

April 22, 2021
Digitex Futures
Digitex

Should You Invest in a Bitcoin ETF?

Dave Reiter
Should You Invest in a Bitcoin ETF? 36

The global investment community was introduced to exchange-traded funds (ETFs) on January 22, 1993, when State Street Global Advisors launched the SPDR S&P 500 ETF. It was designed to track the daily performance of the S&P 500 stock index. The State Street ETF immediately became a popular product among individual and institutional investors because it provided a low-cost approach to portfolio diversification.

Today, 28 years after its launch date, SPY remains one of the most heavily traded investment vehicles within the global financial services industry. It’s not uncommon for daily volume to exceed 100 million shares.

ETFs Gain Popularity Following the Dotcom Crash

During the past three decades, ETFs have exploded in popularity. However, they certainly did not become an overnight sensation. For the first 10 years of their existence, investors basically ignored ETFs because the industry did a poor job of marketing their products and communicating the benefits of owning exchange-traded funds.

Despite the fact that stocks had experienced a roaring bull market throughout the decade of the 1990s, most investors lost money by aggressively speculating in the “high flying” internet stocks. Therefore, by the early-2000s, investors were searching for a low-cost, diversified method for participating in the stock market. ETFs were the perfect solution.

In 2003, the size of the global ETF industry was USD $204.3 billion. Investments in ETFs have exploded during the past 18 years. In fact, with the exception of 2008, the value of exchange-traded funds has increased every year since 2003. In 2010, the ETF asset class reached its first major milestone by exceeding USD $1 trillion in market capitalization.

As you can see from the following table, investors have been pouring money into ETFs during the past decade. In fact, since 2010, the asset class has expanded by 489%. By 2023, the global market capitalization of exchange-traded funds is projected to be USD $12.0 trillion, making it one of the fastest-growing investment vehicles of all time. These numbers are based on data provided by Statista.

  • 2010 – USD $1.313 trillion
  • 2013 – USD $2.283 trillion
  • 2015 – USD $3.423 trillion
  • 2017 – USD $4.690 trillion
  • 2019 – USD $6.194 trillion
  • 2020 – USD $7.736 trillion

ETFs Viewed Through the Lens of Technological Innovation

For the past several decades, the financial services industry has been constantly criticized for its lack of innovation, particularly as it relates to technology. The industry has always been behind the curve in regard to technological innovation. In fact, technology improvements were practically non-existent for the majority of the 20th century.

However, in 1992, one of the most disruptive innovations in the history of financial services was unveiled when E*Trade introduced online trading. This new financial technology introduced millions of first-time traders to the stock market. For example, in 1995, only 300,000 investors in the United States had an online brokerage account. Five years later, in 2000, 11.3 million traders were participating in online trading. This represents a dramatic increase of 3,667%.

Is it simply a coincidence that exchange-traded funds were introduced to the investing public at precisely the same time as online trading? The short answer is, “no.” It’s not uncommon for innovative solutions to arrive in waves or clusters. An important new discovery (like online trading) usually lays the groundwork for other innovators to roll out new trailblazing technology (like ETFs).

In terms of its impact on the financial services industry, ETFs will go down in the history books as one of the most disruptive forces in comparison to other major industry groups. Please review the following list taken from data provided by the U.S. Census Bureau, Statista, BlackRock, and the International Federation of Robotics.

Annual Technology Adoption Rate Since 2009 (CAGR):

  • Smartphones – 24.3%
  • ETFs – 18.0%
  • Social media – 13.0%
  • Retail sales via e-commerce – 11.8%
  • Industrial robots – 10.9%

When most people view this list for the first time, they are shocked to discover how impactful ETFs have been on the financial services industry compared to major innovations across other industry groups. Exchange-traded funds have easily been one of the most disruptive forces of the past 50 years.

Two Disruptive Technologies Join Forces: Bitcoin and ETFs

Bitcoin was launched by Satoshi Nakamoto on January 3, 2009. The early years of Bitcoin (BTC) were very similar to exchange-traded funds. Investors were not the least bit interested in learning about the benefits of owning BTC, which is exactly the same type of reception received by ETFs. It’s not uncommon for people to ignore new discoveries, particularly technological discoveries.

As a general rule, people prefer to avoid disruptive innovations because they don’t like daily changes to their routine. This explains why it takes several years for some of the best discoveries to reach mainstream adoption.

As we previously mentioned, ETFs exploded in popularity beginning in the early-2000s, as investors discovered the benefits of owning exchange-traded funds. It took 17 years for ETFs to reach USD $1 trillion in market capitalization. Bitcoin achieved the same level in 12 years. In fact, BTC became the fastest asset class to reach USD $1 trillion in market capitalization. Most likely, Bitcoin will eventually exceed the asset level of ETFs, which currently stands at approximately USD $8 trillion.

During the past few years, several investment firms have attempted to gain regulatory approval for a Bitcoin ETF. In the United States, the Securities and Exchange Commission (SEC) has not yet approved any Bitcoin ETF application.

However, Canadian regulators provided clearance to Purpose Investments Inc by allowing the investment company to become the world’s first Bitcoin ETF. The official launch date was February 18, 2021. Although the Bitcoin ETF has only been in existence for two months, it has attracted a substantial number of new investors. Recently, Purpose Investments announced that its Bitcoin ETF exceeded USD $1 billion of assets under management. Most likely, this trend will continue as United States investors patiently wait for the SEC to approve a Bitcoin ETF.

Why are Bitcoin ETFs so highly anticipated within the global investment community? Because both of these innovative products provide investors with an opportunity to own a completely new asset class by using a low-cost vehicle like an ETF. Let’s briefly review a few of the main features and characteristics of an ETF.

Low cost

In comparison to mutual funds, exchange-traded funds are much cheaper in terms of the fees investors are required to pay. For example, a typical mutual fund charges a wide variety of fees. The list includes management fees, 12b-1 fee, administrative fees, operating fees, trading fees, auditing fees, and legal fees. The list of fees is endless.

All of these mutual fund fees are added together to create an expense ratio, which represents the total cost paid by the investor to own shares of the mutual fund. It’s not uncommon for investors to pay 1.5% to 2.0% annually. The fees are even higher if the investor uses a financial advisor.

ETFs offer some of the lowest fees in the financial services industry. The average annual ETF fee is 0.4%. Many exchange-traded funds are lower than 0.4%. In fact, many ETFs to charge less than 0.1%. This explains why investors have moved a substantial portion of their investment dollars into ETFs during the past 20 years.

Liquidity

As we previously discussed, the dollar value of ETFs has increased substantially during the past decade. The current value of assets invested in ETFs is approximately USD $8 trillion. This provides investors with a tremendous amount of liquidity to buy and sell without affecting the price of the underlying ETF. The bid/ask spread for the average ETF is very tight because of liquidity.

Accessibility

Exchange-traded funds are available on many stock exchanges across the world. ETFs trade in the same format as stocks. They are quoted on a per share basis and can be bought or sold throughout each trading day. In terms of user experience, trading an ETF is exactly the same as trading a stock.

Transparency

Over the course of the past 20 years, the financial services industry has introduced a wide variety of new investment products to the global investment community. The majority of these products were released prior to the 2008 Global Financial Crisis.

Unfortunately, many individual investors, large institutions, and public pension plans found themselves locked in these opaque and highly complex investment products. When the financial markets began to unravel in late-2008, it became impossible for investors to liquidate their positions. Of course, this only exacerbated the financial crisis.

The financial crisis taught many investors to avoid highly sophisticated investments. This explains why there has been a large increase in ETF activity since 2009. ETFs are one of the most transparent investment products within the financial services industry because ETF providers openly communicate important information to investors in terms of how these products are structured. Consequently, investors have a much better experience participating in ETFs compared to other financial products.

Diversification

Exchange-traded funds are an excellent choice for investors who are attempting to diversify their portfolios. Unlike individual stocks or bonds, ETFs provide investors with the opportunity to select various sectors, industry groups, and geographic locations.

As of 2020, the total number of listed ETFs in the United States was 2,445. Investors can select from a number of different categories: stocks, bonds, commodities, currencies, real estate, and alternative assets. These various categories provide investors with a tremendous amount of diversification. This data is provided by ETF Database.

As you can see, exchange-traded funds provide investors with several excellent features. These features and characteristics are the main reason why investors find Bitcoin ETFs so attractive. It will be a low-cost way for investors to gain exposure to BTC. Due to regulatory constraints, many investors have been unable to purchase BTC through a traditional brokerage account. Therefore, Bitcoin ETFs will allow these investors to purchase BTC for the first time.

GBTC Is Not a Bitcoin ETF

In September 2013, Grayscale Investments launched the Grayscale Bitcoin Trust, which allowed accredited investors to gain exposure to BTC through a private placement offering. The minimum investment was USD $50,000. While this product is still actively managed, it is no longer accepting new investors.

In May 2015, Grayscale received approval from the Financial Industry Regulatory Authority (FINRA) to allow shares of the Grayscale Bitcoin Trust to trade publicly on the over-the-counter (OTC) market, using the ticker symbol GBTC. This allowed individual investors to buy and sell shares of GBTC through a traditional brokerage account.

During the past six years, GBTC has become an incredibly popular product within the Bitcoin community. Prior to the launch of Purpose Investments’ Bitcoin ETF in February, GBTC was the only way to invest in Bitcoin without purchasing BTC through a crypto brokerage account. GBTC exploded in popularity during the 2017 BTC bull market. In late-2020, GBTC experienced another wave of new money, as Bitcoin enjoyed a dramatic rally. As of March 31, GBTC has USD $45.6 billion of assets under management, making it one of the most popular investment products within the financial services industry.

Despite its popularity, many investors are under the impression that GBTC is an ETF. This is not true. Even though it trades on a regulated exchange like other ETFs, GBTC is officially an exchange-traded note (ETN). Essentially, an ETN is an unsecured debt instrument issued by a financial institution. In the case of GBTC, Grayscale Investments created the Grayscale Bitcoin Trust for the purpose of issuing the ETN.

Exchange-traded notes are designed to track an underlying index or security. In terms of GBTC, the underlying security is Bitcoin. When an investor buys GBTC, Grayscale purchases an equal amount of Bitcoin. The investor does not own the BTC. Instead, the BTC is held by Grayscale in the name of the trust.

Grayscale Bitcoin Trust was legally established as an investment trust, which means that the trust is a closed-end fund. The distinguishing characteristic of a closed-end fund is that it issues a limited number of shares when a new product is launched, like the Grayscale Bitcoin Trust. Therefore, GBTC has a limited number of shares that trade on the OTC exchange. These shares can trade at a discount or a premium to the underlying security, which is Bitcoin.

Consequently, it’s not uncommon for the share price of GBTC to trade in the opposite direction of Bitcoin. There are days when the price of Bitcoin rises while the share price of GBTC declines.

ETFs are a much better product because they are not structured like GBTC. Additionally, ETF fees are substantially lower compared to ETN fees. For example, the annual management fee for GBTC is 2.0%. As you know from our previous discussions, the average ETF fee is substantially lower than 2.0%.

Overall, a Bitcoin ETF is a much better product than GBTC. This explains why many investors are waiting to invest in Bitcoin until an ETF is launched in the United States. Most likely, Bitcoin ETFs will go down in the history books as one of the greatest investment products of the 21st century.

Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

All The Ways to Use DGTX on Digitex.io + New Utilities Coming Soon 37

All The Ways to Use DGTX on Digitex.io + New Utilities Coming Soon

Digitex
• Digitex
April 20, 2021

If you’re already familiar with Digitex, you’ll know how unique we are in the business. As an exchange that’s built with our users’ interests in mind, there’s no other platform that lets futures traders execute aggressive short-term trading strategies to capitalize on even the smallest of price fluctuations. Because fee-charging exchanges render scalping strategies null and void, we facilitate commission-free trading through the use of the DGTX token. 

As the lifeblood of the exchange, DGTX is the ultimate utility token and has always been essential for trading on our platform. All traders must trade in DGTX, all account balances are denominated in DGTX, and all profits and losses are settled in our native token. And through the launch of Digitex.io, the DGTX token has been given even more use. Check out all the ways to use DGTX on our exchange–and get a sneak peek of some of our future plans to increase its utility.

  1. Trade on our Zero-fee Markets

If you’re a swing or scalp trader, there really are no better markets to trade than cryptocurrency–and there has never been a better time. With the insane volatility that bitcoin and ether are experiencing lately and as the volatile shocks shake weak hands out of the market, you can make money on Digitex.io by trading on our zero-free platform.

Whether you’re a seasoned futures trader, you’ve got a keen eye for buying the dips and selling the tops, or you simply like to buy and hold, you can now place all your trades commission free and withdraw all your funds without charge as well. 

We currently have two futures markets BTCUSD and ETHUSC with high liquidity and tight bid/ask spreads, and have added six spot trading pairs—DGTX/BTC, DGTX/ETH, ETH/BTC, BTC/USDC, ETH/USDC, DGTX/USDC. So, get started trading now and keep hold of all your profit.

  1. Earn Daily Rewards for Staking DGTX

If you’d rather put your DGTX to work for you to earn a passive income, you can earn daily DGTX rewards by staking your DGTX. Our monthly rewards are valued at $120,000 with up to 160% APY. Simply buy DGTX with zero fees through our Digitex Spot, visit Uniswap to create the DGTX/ETH pool token, connect your Metamask, and deposit your pool tokens into the DGTX Rewards wallet. It couldn’t be easier. Watch your rewards accumulate with one of the highest ROIs in the industry.

  1. Get Paid to Trade through Liquidity Mining 

Our Liquidity Mining program pays traders every minute for market-making on all our futures and spot markets–paying out over $8,000 in daily rewards. This means that, in addition to making trading gains, you can actually earn rewards every single minute.

In exchange for lending liquidity to Digitex’s markets and keeping our spread tight, we distribute up to 290 DGTX rewards proportionally every minute to those traders whose unmatched orders are the closest to the spot price at that time. This amounts to a massive 417,600 DGTX paid out daily!

What’s Coming Next?

Yesterday, we released a Q&A answering your most common questions about Digitex and our future plans. If you had a chance to check it out, you’ll know that we’re not promising launch dates anymore or trying to over-complicate plans as we move forward. But, we will be dropping regular releases every month that will all make the exchange more attractive to new users and existing ones as well.

We’re also working on ways to create more utility for the DGTX token. So, the next release you can expect to see is a staking program with DGTX that lets you earn other  cryptos on our exchange. We think this will be really popular based on community feedback and we’ll be offering some of the most favorable rates in the industry.

We’re also working really hard to roll out more futures markets later this year that are denominated in USDC and which can be traded with zero fees by staking DGTX to reduce or eliminate all trading commissions. This will add further utility to the DGTX token and we believe will attract the traders with bigger bankrolls that have so far been put off by the DGTX token’s volatility. No promises on timing for now, just know that we’re doing everything possible to make this work.

Digitex community, we’re happy to say that we’re on a good roll and our new development process is finally paying off. We appreciate all your positive and constructive feedback and we still have three quarters of the year to go… We’re going to make this happen.

April 20, 2021
Digitex

All The Ways to Use DGTX on Digitex.io + New Utilities Coming Soon

Digitex
All The Ways to Use DGTX on Digitex.io + New Utilities Coming Soon 38

If you’re already familiar with Digitex, you’ll know how unique we are in the business. As an exchange that’s built with our users’ interests in mind, there’s no other platform that lets futures traders execute aggressive short-term trading strategies to capitalize on even the smallest of price fluctuations. Because fee-charging exchanges render scalping strategies null and void, we facilitate commission-free trading through the use of the DGTX token. 

As the lifeblood of the exchange, DGTX is the ultimate utility token and has always been essential for trading on our platform. All traders must trade in DGTX, all account balances are denominated in DGTX, and all profits and losses are settled in our native token. And through the launch of Digitex.io, the DGTX token has been given even more use. Check out all the ways to use DGTX on our exchange–and get a sneak peek of some of our future plans to increase its utility.

  1. Trade on our Zero-fee Markets

If you’re a swing or scalp trader, there really are no better markets to trade than cryptocurrency–and there has never been a better time. With the insane volatility that bitcoin and ether are experiencing lately and as the volatile shocks shake weak hands out of the market, you can make money on Digitex.io by trading on our zero-free platform.

Whether you’re a seasoned futures trader, you’ve got a keen eye for buying the dips and selling the tops, or you simply like to buy and hold, you can now place all your trades commission free and withdraw all your funds without charge as well. 

We currently have two futures markets BTCUSD and ETHUSC with high liquidity and tight bid/ask spreads, and have added six spot trading pairs—DGTX/BTC, DGTX/ETH, ETH/BTC, BTC/USDC, ETH/USDC, DGTX/USDC. So, get started trading now and keep hold of all your profit.

  1. Earn Daily Rewards for Staking DGTX

If you’d rather put your DGTX to work for you to earn a passive income, you can earn daily DGTX rewards by staking your DGTX. Our monthly rewards are valued at $120,000 with up to 160% APY. Simply buy DGTX with zero fees through our Digitex Spot, visit Uniswap to create the DGTX/ETH pool token, connect your Metamask, and deposit your pool tokens into the DGTX Rewards wallet. It couldn’t be easier. Watch your rewards accumulate with one of the highest ROIs in the industry.

  1. Get Paid to Trade through Liquidity Mining 

Our Liquidity Mining program pays traders every minute for market-making on all our futures and spot markets–paying out over $8,000 in daily rewards. This means that, in addition to making trading gains, you can actually earn rewards every single minute.

In exchange for lending liquidity to Digitex’s markets and keeping our spread tight, we distribute up to 290 DGTX rewards proportionally every minute to those traders whose unmatched orders are the closest to the spot price at that time. This amounts to a massive 417,600 DGTX paid out daily!

What’s Coming Next?

Yesterday, we released a Q&A answering your most common questions about Digitex and our future plans. If you had a chance to check it out, you’ll know that we’re not promising launch dates anymore or trying to over-complicate plans as we move forward. But, we will be dropping regular releases every month that will all make the exchange more attractive to new users and existing ones as well.

We’re also working on ways to create more utility for the DGTX token. So, the next release you can expect to see is a staking program with DGTX that lets you earn other  cryptos on our exchange. We think this will be really popular based on community feedback and we’ll be offering some of the most favorable rates in the industry.

We’re also working really hard to roll out more futures markets later this year that are denominated in USDC and which can be traded with zero fees by staking DGTX to reduce or eliminate all trading commissions. This will add further utility to the DGTX token and we believe will attract the traders with bigger bankrolls that have so far been put off by the DGTX token’s volatility. No promises on timing for now, just know that we’re doing everything possible to make this work.

Digitex community, we’re happy to say that we’re on a good roll and our new development process is finally paying off. We appreciate all your positive and constructive feedback and we still have three quarters of the year to go… We’re going to make this happen.

Latest News

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage? 39

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage?

Trading
• Digitex
April 13, 2021

Margin trading has become increasingly popular in the digital asset industry.

When you trade Bitcoin with leverage, you can maximize your profit potential while taking more risks with your positions.

Furthermore, it allows users day trading crypto to earn considerable revenue even on smaller price movements.

In this article, we will take a look at margin trading along with its benefits and potential risks involved for those who trade Bitcoin with leverage.

What Is Margin Trading?

Margin refers to the funds borrowed from a crypto exchange or a brokerage firm to long or short a specific asset on the trading platform.

For that reason, margin trading is the practice in which you trade an instrument using money borrowed from third parties (e.g., a broker, exchange, or other traders).

As a result, you have access to greater capital, which you can use to increase your potential profits as well as to amplify the effects of successful trades.

However, borrowing funds to trade Bitcoin with leverage has very different terms than, for example, getting a personal loan at your bank.

While you don’t have to deposit additional funds into your account – as the exchange uses the assets you have in your margin trading account as collateral – the service provider will liquidate your assets without prior consent if you suffer too much losses.

In such a case, when your margin account’s value falls below the exchange’s required amount, a margin call will occur. As a result, you will lose all of your collateral.

And the more leverage you use to trade Bitcoin, the stricter the exchange’s requirements will be for margin traders.

In most cases, you can trade digital assets on a margin with leverage between 2x and 100x. If you hold 0.1 BTC in your exchange account, a 100x margin would mean that you can borrow funds to trade up to 10 BTC.

What Are the Benefits of Trading Bitcoin With Leverage?

Below, we have collected the advantages of margin trading crypto:

  • More profits: When you trade Bitcoin with leverage, you are using more funds than what you have in your account. For that reason, successful trades on a margin will bring you more profits than ones without leverage.
  • Short trades: Without borrowing funds, you can only enter long positions for digital assets. On the other hand, margin trading allows traders to profit from bearish price movements by shorting crypto.
  • Profits on smaller price moves: Traders with short-term trading strategies like scalping aim to generate profits on small price movements very quickly, which they can achieve with margin trading. Moreover, trading Bitcoin with leverage also allows traders to generate income even in times of low volatility.
  • Diversification: With margin trading, traders have access to increased capital, which they can use to diversify their funds into more assets to maximize their gains and limit their risks.

Are There Any Risks of Margin Trading Crypto?

While trading Bitcoin with leverage certainly has its benefits, it also comes with risks for traders.

The first is the most obvious one: the more profits you (potentially) earn, the increased risks you face when trading assets on any market.

For that reason, if the asset’s price you trade takes a significant hit, it could trigger a margin call in which the exchange liquidates all your collateral.

As mentioned before, the risks of margin calls are greater when you are using more leverage for your trades.

As part of your crypto trading strategies, we recommend placing stop-loss orders to minimize the chances of margin calls, limit your losses, and protect your positions when trading Bitcoin with leverage.

Trade Bitcoin With Leverage at Digitex

Margin trading is an excellent practice for traders to diversify their assets, maximize their profits for winning trades, as well as to short cryptocurrencies.

However, margin trading involves more risks than the spot market. Therefore, it requires traders to leverage more disciplined crypto trading strategies that involve handy tactics, such as placing stop-loss orders.

Another great way to reduce the risks of margin trading is to trade crypto for free. By paying less fees, you maximize the chances for winning trades while keeping 100% of the profits.

The good news is that you can do exactly that on the next-generation zero-fee Bitcoin derivatives exchange Digitex.

Sounds great, huh?

Trade Bitcoin with leverage at Digitex now to enjoy a zero-fee margin trading experience!

 

April 13, 2021
Trading

What Is Margin Trading and Why Should You Trade Bitcoin With Leverage?

Digitex
What Is Margin Trading and Why Should You Trade Bitcoin With Leverage? 40

Margin trading has become increasingly popular in the digital asset industry.

When you trade Bitcoin with leverage, you can maximize your profit potential while taking more risks with your positions.

Furthermore, it allows users day trading crypto to earn considerable revenue even on smaller price movements.

In this article, we will take a look at margin trading along with its benefits and potential risks involved for those who trade Bitcoin with leverage.

What Is Margin Trading?

Margin refers to the funds borrowed from a crypto exchange or a brokerage firm to long or short a specific asset on the trading platform.

For that reason, margin trading is the practice in which you trade an instrument using money borrowed from third parties (e.g., a broker, exchange, or other traders).

As a result, you have access to greater capital, which you can use to increase your potential profits as well as to amplify the effects of successful trades.

However, borrowing funds to trade Bitcoin with leverage has very different terms than, for example, getting a personal loan at your bank.

While you don’t have to deposit additional funds into your account – as the exchange uses the assets you have in your margin trading account as collateral – the service provider will liquidate your assets without prior consent if you suffer too much losses.

In such a case, when your margin account’s value falls below the exchange’s required amount, a margin call will occur. As a result, you will lose all of your collateral.

And the more leverage you use to trade Bitcoin, the stricter the exchange’s requirements will be for margin traders.

In most cases, you can trade digital assets on a margin with leverage between 2x and 100x. If you hold 0.1 BTC in your exchange account, a 100x margin would mean that you can borrow funds to trade up to 10 BTC.

What Are the Benefits of Trading Bitcoin With Leverage?

Below, we have collected the advantages of margin trading crypto:

  • More profits: When you trade Bitcoin with leverage, you are using more funds than what you have in your account. For that reason, successful trades on a margin will bring you more profits than ones without leverage.
  • Short trades: Without borrowing funds, you can only enter long positions for digital assets. On the other hand, margin trading allows traders to profit from bearish price movements by shorting crypto.
  • Profits on smaller price moves: Traders with short-term trading strategies like scalping aim to generate profits on small price movements very quickly, which they can achieve with margin trading. Moreover, trading Bitcoin with leverage also allows traders to generate income even in times of low volatility.
  • Diversification: With margin trading, traders have access to increased capital, which they can use to diversify their funds into more assets to maximize their gains and limit their risks.

Are There Any Risks of Margin Trading Crypto?

While trading Bitcoin with leverage certainly has its benefits, it also comes with risks for traders.

The first is the most obvious one: the more profits you (potentially) earn, the increased risks you face when trading assets on any market.

For that reason, if the asset’s price you trade takes a significant hit, it could trigger a margin call in which the exchange liquidates all your collateral.

As mentioned before, the risks of margin calls are greater when you are using more leverage for your trades.

As part of your crypto trading strategies, we recommend placing stop-loss orders to minimize the chances of margin calls, limit your losses, and protect your positions when trading Bitcoin with leverage.

Trade Bitcoin With Leverage at Digitex

Margin trading is an excellent practice for traders to diversify their assets, maximize their profits for winning trades, as well as to short cryptocurrencies.

However, margin trading involves more risks than the spot market. Therefore, it requires traders to leverage more disciplined crypto trading strategies that involve handy tactics, such as placing stop-loss orders.

Another great way to reduce the risks of margin trading is to trade crypto for free. By paying less fees, you maximize the chances for winning trades while keeping 100% of the profits.

The good news is that you can do exactly that on the next-generation zero-fee Bitcoin derivatives exchange Digitex.

Sounds great, huh?

Trade Bitcoin with leverage at Digitex now to enjoy a zero-fee margin trading experience!

 

Latest News