Nigel Green: Bitcoin took a beating but investors profited with algorithm technology

Bitcoin has been the subject of a battering recently, plummeting to its lowest price in over a year.

Although, despite the world’s largest digital currency taking a nosedive, many cryptocurrency analysts are forecasting a rapid rally, with a number predicting a price surge before the end of 2018.

As we’ve seen over time, even though this is only short-term, this drop in Bitcoin’s value will have tripped up a lot of investors.

That said, investors making the most of the deVere Digital Assets solution will have been sheltered from this recent volatility.

In association with Dalma Capital Management Limited, deVere Digital Asset Funds took short positions on Bitcoin at $6,300 and Ethereum at $205 before the price dropped below $5,600 and $180, respectively, for the first time in 2018.

Indeed, using a pioneering algorithmic system, this actively managed cryptocurrency proposition will have protected investors from the turbulence, permitting them to generate a profit from the short signals created by the system.

It goes without saying that this highlights the effectiveness and fundamental value to investors seeking to benefit from the positive aspects of the cryptocurrency market, yet at the same time enjoying reduced volatility.

The system functions on trades known as arbitrage. When the price of one digital currency, such as Bitcoin or Ethereum, is higher on one platform than another, this is acknowledged by the system to create profit from the price distinction across the platforms.

These trades allow profit to be generated but with minimal directional market risk.

As a result, these opportunities are being created within the digital assets market that haven’t been seen in conventional markets for decades.

We’re seeing ample arbitrage possibilities, with the prices of the top 25 digital assets oscillating over 400 liquidity venues.

Therefore, the ability to trade both long and short results in prospective profits, regardless of what direction the market is taking at any given time.

I’ve said many times that cryptocurrencies are the future of money, something which is becoming more extensively acknowledged across the globe.

Nonetheless, the dominance and power Bitcoin has over the crypto sector will, in all likelihood, decrease over the next 10 years. The principal reason for this is with growth of mass digital currency adoption, we’ll see an increasing number of cryptocurrencies being launched by both private and public sector organisations.

As such, Bitcoin’s competition will escalate and dent its share of the market.

That said, I believe the cryptocurrency sector will increase 5,000 per cent over the coming decade. With the present market value at $400 million, this could see it reach $20 trillion in a decade.

An increasing number of major institutional and retail investors, as well as global financial institutions and regulators, amongst others recognise that digital currencies are the future of money.

Yet, as this current sell-off highlights, the crypto market remains volatile. However, with the use of ground-breaking technology, investors can minimise their interaction with such volatility.

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