Generally, all cryptocurrencies are volatile because they are relatively new in the market, developed in 2008. Think of them as a new project that requires close monitoring until it settles and holds some actual value. We can explain this volatility with Bitcoin (BTC) as a use case. The true price of BTC stands between $50,000 and $60,000. The coin’s volatility happens in three cycles, mid, high, and low.

However, the volatility ranges aren’t arbitrary. They are driven by market forces, prevailing trends, and general consumer behavior. On the flipside, cryptocurrencies can be very lucrative if you can study these trends, gauge the volatility, and know where to put your money. In the latest episode of the Human and Machine channel, Victor Lee, the Co-Founder of DAOventures, and Thierry Hubert, the CTO of Digimax Global Incorporated, joined us to discuss the top strategies of winning in the volatile crypto market.

The Difference between Trading Financial Instruments and Crypto Assets

Trading under the DeFi structure is pretty different from traditional finances, such as stocks, bonds, and shares. As Hubert says, “this is where Wall Street meets Vegas.” In the traditional finance system, investors leverage various factors to help them make sound decisions. This includes seasonality, the state of supply chains, quarterly and annual reports, and sales data.

On the other hand, crypto doesn’t offer these insights. “Cryptocurrencies have no business reports; they operate on their own,” says Hubert.  In other words, the notion of value is what perceives the prevailing price of different cryptocurrencies.

“So, we acknowledge there is uncertainty. There is volatility,” says Hubert. However, thanks to AI, investors can now get insights into this volatility and mitigate risks. With AI, investors can study how patterns evolve and measure their intensity before putting money on a specific coin.

The Different Emerging Coins Can Help Mitigate Volatility

Crypto is volatile because it doesn’t have any central regulation or a form of an independent variable. From a traditional standpoint, it’s nigh impossible to create an investment strategy around crypto. Fortunately, the emergence of new coins in the market gives investors a reference point, the potential of growth. This is where the catch is, and investors can leverage that to create a trend.

You can have an early detection on a certain price, whether it’s going up, down, or plateauing at a horizon. Thierry’s CryptoHawk solution gives a better insight. “We have something called the trend watch, where we have a horizon of the high price and the low price based on the direction you have. So, when it’s strategic to buy, sell, or short, for example, you can easily set the alert,” says Hubert.

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Automating Investments on the Blockchain

Investors can also mitigate the market’s volatility by automating their investments on the blockchain. Remember, there are two main ways of investing in any crypto. First, you can buy a specific coin, hold it, and anticipate the value to rise. Alternatively, you can put your investment on a mixed portfolio by leveraging multiple sets of strategies. That’s where automation kicks in.

“We do not manage and touch your money. Instead, we create all these strategies that help you invest in DeFi on the blockchain. So you just put your money in the first step, and the strategy will automatically help you to invest and then you profit,” says Lee.

However, these strategies are not the same. Investors have basic options that involve minimal risk but yields less return. On the other hand, advanced strategies like the Metaverse/NFT index pose high investment risks but can generate up to 70% in profits per year.

Takeaway

Crypto is a volatile yet very lucrative space. You can make a fortune if you navigate the risks and put your money in the right basket of strategies, as Hubert puts it. Watch out for our next episodes for a more in-depth insight into DeFi in comparison with the traditional finance system.

About Human and Machine

The Human and Machine is a go-to channel for the traditional consumer who wants to understand complex DeFi projects in layman’s language. The hosts, Hikaru (the Machine) and Tlahui (the Human), make this possible in 30-minute podcast interviews. The show hosts prolific names in the DeFi industry, including CEOs, Co-Founders, CTOs, and other knowledgeable executives.

About CryptoHawk

CryptoHawk is an AI solution, powered by Digimax Global Inc. The platform gives investors real-time insights into the Bitcoin and Ethereum markets to enable them to trade prudently. Besides mitigating risks, the platform also allows you to exploit the market’s volatility to your gains.

About DAOventures

DAOventures is a go-to platform for automating DeFi investment strategies. The investor only needs to put money on a basket of mixed strategies and start to generate profits. Some of the platform’s strategies include the Citadel Vault, Stonks, Metaverse, Elon’s Ape, Cuban’s Ape, and Money Printer.

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