Preparing for Profits: Capitalizing on Crypto Bull Run Ahead of Facebook Libra Launch
News has broken over the past months of the impending launch of Facebook’s new cryptocurrency, named “Libra”. The first mention of Facebook’s entry into crypto-tech was a line in CEO Mark Zuckerberg’s 2018 New Year’s Dispatch where he states that cryptocurrency and encryption are “important counter-trends” to centralization, and that he was interested to “go deeper and study the positive and negative effects of these technologies”.
The response to the news of the creation of a Facebook-controlled crypto has generated polarized responses and debate. While news outlets such as the Guardian have echoed the concerns of many with statements that “Facebook’s new cryptocurrency must be resisted”, much of the crypto-sphere has responded jubilantly to the news.
For years, the cryptocurrency industry has defended against criticisms that while blockchain may be a legitimately-useful tech, that cryptocurrency has essentially been a money grab and technology with no longevity. Ironically, many of those making these claims have either publicly changed their views, or it’s been found that they actually have held crypto-assets simultaneously to making these claims.
Facebook, however, is mainstream. The majority of the world’s population uses Facebook, with more than 1.56 Billion people that use Facebook on a daily basis. It’s incredibly difficult to hold the viewpoint that cryptocurrency has no future when the world’s largest social media platform is now creating one.
The potential to trigger a bull run magnitudes larger than any previously
2019 already has had many significant events for the cryptocurrency industry as a whole taking place.
An unprecedented number of confirmed Bitcoin transactions per day was reached in May of 1,115,136, and Bitcoin mining revenues and metrics across the board have also made tremendous recoveries since the bear market in 2018.
One of the most significant developments to affect the exposure and adoption of cryptocurrency on a massive scale is the potential introduction of the world’s first Bitcoin EFT this year. The proposed financial instrument would allow enormous flows of investment to legally and securely enter crypto markets from traditional investment pools, and is currently being considered by the SEC.
How has the Bitcoin rally impacted exchanges & trading behavior?
As a result of these several contributing factors, trading platforms and exchanges have been doing record business, and many newer and more advanced platforms have moved into the market since the 2017 bull run.
Since its launch at the beginning of the year until now, strong prices and increased trader adoption has seen the crypto margin trading platform, PrimeXBT, reach daily trading volumes of over $300 Million and experience unprecedented growth over such a short period of time. Likewise, long-standing platforms such as Binance and Huobi have also seen a much stronger 2019 compared to 2018.
The reason for PrimeXBT’s exponential growth, in particular, can be attributed to the trading platform’s margin trading feature by offering the industry’s highest leverage of up to 100x to the widest range of crypto assets. Thus, enabling traders to magnify their profits in the midst such favorable trading conditions.
Additionally, margin trading provides the possibility to short-sell and profit from a market’s decline. By consequent of 2018’s crypto bear market, followed by the slow start to 2019, short selling via margin trading became more prevalent prior to Bitcoin’s price increase which only kicked off in early April. Therefore, many traders were already well accustomed to the use of leveraged trading by the time this rally commenced, and PrimeXBT was the best place to trade in this fashion.
The growing trend of margin trading can further be seen with the crypto exchange giant, Binance, now preparing to release a margin trading feature, and OkEX upping their leverage from 3x to 5x so to meet the demand and request of their traders. Although, barely comparable to PrimeXBT’s 100x which has seen incredible user profit statistics by the use of leverage in comparison to competitor platforms. For instance, after the very first bitcoin pump in the first week of April, 70% of the platform’s traders experienced profits of up to 300% - 1200% as opposed to extreme losses experienced by the alternate 100x bitcoin trading platform, BitMEX.
Without even taking the launch of Libra into account, 2019 is already shaping up to be the beginning of a new phase of positive price action within crypto markets. With the news of Facebook supporting the value of cryptocurrency enough to build one of their own, huge amounts of attention from people who typically are mostly unaware of it will now be directed towards the technology.
As more people learn about cryptocurrency through the use of Libra, it will likely act as a “gateway crypto” for many users to then wonder about the other 2,000+ crypto-assets currently available to use and invest in. This, in turn, will lead to increased investment into the crypto market, pushing prices higher, and creating a feedback loop which may possibly end with prices significantly higher than all-time highs set in 2017/2018.
When all of this kicks off, what’s the best way to monopolize on the next big bull run?
2019 has seen the trend for traders to move away from rudimentary strategies that have been the mainstay of the cryptocurrency industry since its inception and toward a broad range of newer opportunities for generating profits.
As aforementioned, crypto margin trading has seen a large increase in trader numbers adopting this method at major platforms like Bitmex and PrimeXBT, based on the potential to generate higher revenue on average than with strictly non-margin-trading platforms which were more commonly used in previous years.
Also, the ability to access both cryptocurrency and traditional markets on a single platform is becoming a popular trend amongst a number trading platforms, allowing users to seamlessly develop strategies which are multi-asset-classed and can be executed instantaneously.
PrimeXBT, as well as traditional asset platforms such as eToro and IG.com, have all chosen to provide users with access to a wider range of assets by incorporating both cryptocurrencies and traditional assets like stocks, forex and commodities together under one roof. This is significant especially in the case of a new cryptocurrency bull run, because of the opportunity to rapidly transfer funds from traditional assets to cryptocurrencies, beating traders that have to move assets through multiple intermediaries.
Whether or not existing crypto traders support the concept of a Facebook-governed cryptocurrency, the industry as a whole will enjoy a huge influx of new capital and opportunity as a result of its endorsement by such a prominent tech giant.
What remains to be seen is just how big an effect the launch of Libra will have on crypto markets and whether this will be the beginning of the biggest bull run yet.