Learn more about cryptocurrency trading strategy "Neutrality" Which made 3 times the profits of American bonds! (2024)

Bitcoin hits highest level since November 2021

received Bitcoin Price (BTC) to $64,000 on several exchanges, the highest level since November 2021. The meteoric move from Monday's low of around $51,500 was attributed to Wall Street's embrace of spot bitcoin ETFs. The CoinDesk 20 Index, an index measuring the overall market, is up more than 10% this week.

Expectations will continue to rise

The consensus is that the rise will continue in the coming months, bringing the price to the six-figure level. “Our analysis predicts reaching a conservative target price of between $100,000 and $120,000 by Q4 2024. The cycle peak could be reached sometime in 2025 in terms of total cryptocurrency market capitalization” , said analysts at cryptocurrency exchange Bitfinex.

The analysts add: “ETFs have introduced 'passive demand,' meaning that demand comes from investors who are largely indifferent to prices.
They view Bitcoin as a store of value rather than a volatile tradable asset. This was the case several years before the introduction of ETFs.

Profitable returns for neutral strategies

Earlier this week, a technical analysis expert said Pierre Brandt that Bitcoin BTC Price It could peak at $200,000 by September 2025. This prediction will definitely appeal to directional traders (trading with the trend).

Read also: Bitcoin price will reach 200,000 in 2025 according to this expert

But even traders who don't rely on trend strategies or neutrality strategies, which are generally less risky. They have many opportunities to make profits.

For example, the neutral “Cash and Carry” strategy now achieves a return more than three times that of 10-year US Treasuries. This is called the risk-free rate.

“Market neutral” investment strategies aim to reduce or eliminate exposure to general market risks. These strategies seek to achieve positive returns regardless of the overall market trend, whether bullish or bearish.

“Cash Carrier” neutrality strategy

The “cash carrier” strategyCash and Carry" is a trading strategy primarily used in the commodity and cryptocurrency markets. But it can also be applied to any asset that has spot and futures markets.

The basic idea is to take advantage of price differences between the spot market (where the asset is bought or sold at the current market price) and the futures market (where it is agreed in advance that the asset will be bought or sold at a future price). date at a specific price).

In this strategy, an investor buys an asset in the spot market and simultaneously sells a futures contract for the same asset at a higher price. The objective is to profit from the difference between the spot price and the futures contract price. This strategy works best when there is a predictable and sustainable cost gap between the two markets.

To implement the “bearer cash” strategy, investors in the cryptocurrency market must take into account the following factors:

Cost of ownership: includes the cost of storing the asset and any associated financing costs.

Market risk: the potential decline in the value of an asset before the expiration of the futures contract.

Price differences between spot and futures markets: should be sufficient to cover the cost of carry and provide a profit margin.

Attracting more capital into the digital currency market

This strategy is often used by professionals and institutional investors due to the need for an in-depth understanding of the markets and significant capital to cover the associated costs and risks.

In other words, in Digital Currency Market They are used by whales, whose movements greatly affect market prices.

According to blockchain analytics firm Glassnode, the three-month Bitcoin futures “cash bearer” strategy generates an annualized return of more than 14%.

This is more than three times the 10-year U.S. Treasury yield of 4.27% and 2.8 times the 1-year U.S. Treasury yield of 5%.

A relatively high yield can attract more money into the cryptocurrency market.
“The yield available in futures markets will likely begin to attract market makers back into the digital asset space, strengthening market liquidity,” Glassnode said in the weekly newsletter.