November left its mark on crypto investors worldwide. After leaked Alameda Research’s (FTX’s sister hedge fund) balance sheets revealed billions of dollars’ worth of FTX’s own token FTT was held by the fund. The token was then used to furnish further loans to add to the shock. If FTT was to suddenly drop then both Alameda and FTX could collapse, which it did.
Some investors erred on the side of caution and quickly withdrew their funds before a virtual bank run crumbled the exchange. With a collapse of a major exchange, paired with the plummeting price of Bitcoin, what does the future look like for Cryptocurrency?
In 2022, investors flocked to derivatives trading to take advantage of the continuous volatility in the market. Shorting Bitcoin seemed to be the new strategy compared to the long-term holding strategy that was once favored by investors worldwide. Eightcap’s Chief Technology Officer, Bryn Newell comments on the shift from traditional investing to trading cryptocurrency derivatives. Eightcap is a global derivatives provider, offering its clients access to the most extensive list of cryptocurrency derivatives currently available. Newell says there has been a notable increase in crypto traders, especially during times of extreme volatility. “Investors who have a long-term holding strategy face trouble when markets collapse, panic sets in, and a sell-off ensues. Some investors have begun to realize potential when speculating on the price of Crypto by trading derivatives. Obviously, with leverage trading, there is risk attached, but there are also gains to be made.”
The demand for trading crypto derivatives is only set to continue, especially after the recent demise of FTX. “Even though there is strong demand for trading derivatives, we will be dealing with investors who have unfortunately not been able to access their funds, leading to a distrust in some crypto providers. Some are thinking of perhaps entering the crypto space but are on the more cautious side. Inevitably the news with FTX has shaken everyone involved in the crypto market, there are thousands of customers in Australia who are still owed a lot of money due to the collapse of the exchange.
“That’s why we are committed to providing an exceptional trading experience and a place where traders can trust that their funds are secure. We keep client funds in a segregated Tier 1 bank account, meaning that we aren’t using client funds to operate or punt. To add to this, we are regulated in multiple jurisdictions including the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), and the Securities Commission of The Bahamas (SCB),” Newell states.
Crypto trading will be more in demand in 2023
Crypto trading is set to become more popular next year. Most derivative providers are regulated and adhere to stringent regulatory requirements, Eightcap being one of them. Being regulated in the space is a highly attractive selling point when trying to acquire crypto traders, now more than ever. Eightcap addresses this with its new offering specifically targeting exchanges. Newell adds, “We are working on a unique B2B proposition, targeting exchanges and other consumer-facing businesses which will ultimately enhance their existing and new client experience.”
On the retail side of the business, crypto trading is set to increase, especially among traders who want to diversify their existing trading portfolio. Currently, Eightcap’s Australian client base is predominantly trading FX and Gold. However, the broker notes that with its extensive crypto offering, more clients have wanted to enter the crypto market. The broker’s offering is also paired with ultra-low spreads which adds to the influx of crypto traders. Newell comments, “to trade BTC contracts with us for example, the client will be looking at a price range varying from $12 to $15, this is cheaper than any mainstream exchange.”
“On top of pricing and product range, we also provide free educational resources and tools to those wanting to enter crypto but don’t have the foundational knowledge to open live trading positions. We prioritize education, as we firmly believe that our clients should be equipped for the volatility that the markets hold. We offer an exclusive tool for crypto trading, CryptoCrusher is a dashboard that will provide daily trade ideas in real-time, allowing traders to open a position based on reliable data.
“In terms of education, our clients can gain access to market insights from some of the best minds in the industry. Our latest initiative TradeZone involves inviting an expert to take our guest spot for the month, they will provide trade ideas, weekly updates, and trade alerts and tips allowing our clients to stay ahead of the markets,” Newell adds.
Eightcap is an award-winning broker that was founded in Melbourne, Australia in 2009. Since then, the broker has rapidly expanded and has several offices worldwide. Clients have access to over 800 financial instruments including Forex, Indices, Shares, Commodities, and Cryptocurrency CFDs. Cryptocurrency derivatives on offer include altcoins, crypto-crosses, and crypto indices, making it one of the largest crypto derivatives offerings in the industry.
Disclaimer: This is a paid post and should not be treated as news/advice.
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