The cryptocurrency market over the last year has received a lot of attention, and is back at the forefront of mainstream finance. This time is very different, and the asset class now has the attention of institutional investors who are now realizing the technology is here to stay.
The still speculative market is very young, and asset prices got a little overheated too quickly to start 2021. After a record breaking Q1 for positive returns, Q2 closed with record breaking losses. Q3 has been all about picking up the pieces and slowly getting back into the market.
Mainstream traders who got destroyed during the volatility who might have given up, now have flocked toward alternatives. This guide will focus on what those alternatives are, and how Covesting has become the most popular trading alternative as a result.
Recapping The 2021 Crypto Market Volatility
Once Bitcoin broke through its former all-time high in late 2020, it set off a chain reaction that is still going strong today. Bitcoin tripled in price from there, and altcoins have absolutely exploded in value. The crypto market is now worth trillions and is taken a lot more seriously worldwide.
Governments are now debating Bitcoin and other coins and regulation is coming. In the meantime, speculation ran wild and allowed asset prices to get out of control. Coinbase Global went public on the stock market, and at the time the market was so bullish it was blinded by the reversal that was brewing.
After Bitcoin touched $65,000 and Ethereum more than $4,400, both cryptocurrencies nosedived by more than 50%. The entire market collapsed and more than $1 trillion was wiped out in a flash.
The crypto market selloff was a buying opportunity for some, which has helped prices recover and as we mentioned, that chain reaction is strong and could result in another bullish impulse soon enough.
But the carnage was enough to cause severe damage not only to people’s portfolios but also to their egos. Many traders were ready to hang it up, call it quits, and liquidate all their active positions. Others sought out alternatives to trading.
The Explosion of Trading Alternatives
Investing, trading, and even HODLing is commonplace all throughout crypto, or else it used to be. Since the selloff, the market has taken a lot of strange twists and turns. The wealthy and whales have moved onto NFTs, or non-fungible tokens.
These high wealth users are buying up all kinds of digital art and JPEGs with CryptoPunks, Apes, Simp Mermaids, and even cartoon Rocks. Many of these projects don’t even make sense, such as an “invisible” rock that sold for several ETH.
While NFT is in a complete mania phase by itself, generating passive income through liquidity provisioning and staking is also picking up steam thanks to DeFi. DeFi allows for things like permissionless lending and borrowing, and has caused an emergence of automated market making platforms like Uniswap and Pancakeswap.
These decentralized trading platforms rely on users to provide the liquidity, and in exchange they receive a variable APY based on the platform’s fees. Each protocol divides the fees generated across users and APY rates increase with demand.
Other proof-of-stake coins offer an APY paid in crypto rewards by locking up tokens for use to secure the blockchain and validate transactions. Even Ethereum recently added such a system and has resulted in a large increase in institutional interest.
How Covesting Became The Top Trading Alternative Solution
Covesting copy trading was another solution that blew up when the market became too tough for the ordinary. And most of it was through word of mouth.
After the dust settled on the crypto market carnage, it was clear there were not many winners remaining. However, those who were profitable during the selloff really stood out as contrarian traders and among the best of the best.
Strategy managers on Covesting had as much as 20,000% profits to show for their short positions that were timed well around the time Bitcoin topped out. Followers made a profit by simply picking winners out of the Covesting leaderboards. Risk and success metrics make it clear who to follow, and tools are provided to help secure profits and protect against drawdowns.
More simply put, professionals who know how to hedge positions and survive in any market conditions were able to stand out and make more money, while those that aren’t as skilled were able to step aside and copy the trades of the more experienced traders instead.
Better yet, Covesting later introduced their own version of the aforementioned yield-generating services. Rather than have to connect wallets to DeFi protocols directly, storing any idle crypto assets within the PrimeXBT account system allows users to access top DeFi protocols without ever having to leave the account dashboard.
Variable APY rates reach as high as 35% across BTC, ETH, USDT, and USDC. Up to a 2x APY boost is offered with a certain number of COV tokens staked. COV token staking also unlocks a variety of benefits within the copy trading module for strategy managers and followers, which include trading fee discounts, following limit increases, and more.
Summary: The Growing Covesting Ecosystem Has An Opportunity For Everyone
Covesting is available at the award-winning margin trading platform PrimeXBT as part of a white label licensing agreement. The next major step in the Covesting ecosystem with Yield Accounts will also live on PrimeXBT thanks to a continued partnership. PrimeXBT has all the advanced trading tools necessary for Covesting users across the peer-to-peer trading community to successfully copy trade CFDs on forex, stock indices, commodities, crypto, metals, and much more.
When markets get especially ferocious rather than step out of the way completely, consider either stepping into the role of a follower and copy a trader who can show their skills via the fully transparent leaderboards. If you survived the selloff yourself, rather than becoming a follower, starting a career as a strategy manager could lead to additional revenue streams, especially when combined with other Covesting tools like Yield Accounts.