How to make money on Bitcoin’s volatility with PrimeXBT’s Covesting?

From around $ 17.4k to $ 3,800 a year later and then up again to reach over $ 50,000 in February 2021, Bitcoin (BTC) prices have taken everyone on a roller coaster ride. This high volatility in BTC prices has given early investors and traders fortunes overnight.

Yes, the profits associated with trading and investing in cryptocurrencies are huge. But they also come with additional risks. Therefore, it is important that you make smart and educated choices and strategies when investing your funds in cryptocurrency.

However, it is easier said than done. This is why it is suggested that you follow expert strategies by using PrimeXBT’s Covesting module to make decisions for you until you feel confident.

Take advantage of Bitcoin’s volatility.

Let’s look at how you can monetize Bitcoin volatility using some popular strategies.

  • Goes a long way on the price of Bitcoin

Going long on Bitcoin refers to buying it at a low price and waiting for the prices to rise before selling it to make money. This strategy is most suitable for people who want to make money in a bullish market. In this case, the difference between your purchase price and the selling price will be your profit.

  • Goes short on Bitcoin price

Going short with Bitcoin refers to selling a Bitcoin at a higher price to repurchase it when the price drops. As opposed to going long, going short is for traders who expect a bearish market trend. In this case, the difference between your original selling price and your new purchase price is your profit.

Let us try to understand these positions with an example.

Month BTC price
Jan $ 10,000
feb $ 20,000
March $ 15,000
April $ 30,000

Long position

Suppose you bought 1BTC for $ 15,000 and want to go a long way. So you wait for the BTC price to rise before you sell. In this case, when the BTC price reaches $ 30,000, your total profit will be $ 15,000.

  • The value of Bitcoin = $ 15,000
  • Sales price = $ 30,000

Total profit = selling price – BTC value = 30,000 USD – 15,000 USD = 15,000 USD

Short position

Suppose you open a short position or sell your BTC for $ 20,000 in February (You can open a short position for 0.01 BTC due to available 1: 100 leverage).

Now you’re waiting for the price to drop so you can repurchase it, like in March for $ 15,000. In this case, your profit will be $ 5,000, which will be transferred to your wallet or account, and you can use bitcoin to repay if you used the leverage.

  • Sale price – $ 20,000
  • Purchase price – $ 15,000

Profit = selling price – buying price = 20,000 USD – 15,000 USD = 5,000 USD

Using PrimeXBT’s Covesting module

Crypto-trading comes just like trading in the stock market with many technical jargons and technical aspects that it takes time to learn.

Instead of waiting several months to do your own research, you can use PrimeXBT’s Covesting module, which allows you to emulate the trading activities of various top strategy executives. This will allow you to earn a similar profit ratio as the top investors.

How to choose the right covesting strategy for success?

Let us consider some things that you need to consider while choosing the right covesting strategy for success and profit.

It is important that you do your research and determine the consistent performers from the pool. No matter how skilled or experienced you are, any trader loses some money at times. But how they are able to manage their losses while protecting capital is more important.

  • Massive gains require massive risks

Some strategies can yield faster and exponentially more gains compared to others. But the higher the gains a strategy provides, the higher the risk of losing your money.

Each strategy page gives you insight into how much equity the strategy manager has allocated to the strategy. More equity means the manager will be wary of the actions he takes.

  • Look at historical margin

Each strategy offers a historical graph showing the margin between 0% and 100%. This graph helps you determine the risk associated with the strategy.

Remember, the higher the number, the less the risk and vice versa.

One day you will see Bitcoin prices rise high and the next day drip to the lowest limits. No matter how consistently a strategy works, your money is always at stake.

So it is better to secure your winnings when you make a profit and reinvest later again.

  • Re-evaluate and diversify strategies

It is wise to reevaluate your decisions after periods to understand whether the strategies are still working or not. Keep an eye out for other opportunities and leaders. This is because what did not work yesterday may be working today, and your consistent execution strategy may begin to suffer losses.

Also, never put all your eggs in one basket.

Is PrimeXBT’s Covesting Module Risky?

All of these strategies are controlled by humans and can result in loss. Needless to say, the moment you invest your funds with the hope of making a profit, they become vulnerable to market uncertainty and thus losses. As a rule of thumb, always invest the amount you can afford to lose without harming your lifestyle.

But doing some research and investing your money with executives who have remarkable track records is the right way to go.

Conclusion

It takes time to gain experience and understand the small details associated with investing in cryptocurrency, especially Bitcoin. But that does not mean you have to wait several months before you actually earn anything.

Short and long positions are two options for trading Bitcoin. Or you can choose from a pool of expert traders to follow their strategies and make money with them. But if you decide to do the latter, do not forget to do your research as the markets are unpredictable and can result in losses rather than profits.

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