Crypto trading, alongside Forex trading, has become a very popular way for people to earn additional money. While crypto still has a long way to reach the heights of Forex, this industry is gradually becoming a prominent one in the financial markets.
Crypto offers a high level of anonymity, speed of transaction, and lack of government surveillance. Because of that, most people are turning to Bitcoin and other cryptocurrencies.
The number of crypto companies grows every time. It is a very big competition, so distinguishing yourself from the other competitors is essential for success. Companies are adopting various strategies to attract more traders and in this article, we will have a look at them.
Crypto contests
Like Forex contests, crypto contests are also very popular for attracting more customers. This is a competition where traders challenge each other and the winner gets a solid prize. Like Forex contest 2021 a lot of crypto contests are planned for the upcoming year. But it should be said that these contests are extremely difficult to win. But such a strategy proved to be very effective for attracting more clients.
As soon as there are more participants in the contest the prize pool is significantly higher.
Margin trading
Margin trading is the exercise of trading with assets (in this case, cryptocurrency) within the exchange, but with the provision of credit by a third party (usually, this party is the exchange itself).
In other words, margin trading is a credit trade at a certain percentage. Leverage capabilities allow us to significantly increase the size of potential profits.
Margin trading is particularly in demand in markets where assets are characterized by low volatility. But recently this feature has become in demand in the cryptocurrency market, although virtual currencies clearly do not differ from the low level of risk.
If you take traditional classical markets, the money in the loan is usually provided by investment brokers.
Features of margin trading of cryptocurrency
Let's take a closer look at the features of margin trading. Let's imagine the situation - you trade on the cryptocurrency exchange, and at some point, you realize that a certain cryptocurrency will soon give growth.
You have only $500 in your account and you turn to the exchange (or other traders who lend) for credit support.
If the expectations are met, everyone wins: after the closing of the trade, you return the funds with % - you have a profit from the trade. But they may not justify themselves.
Specifically, if you bought BTC, counting on a 30% increase, and it suddenly fell to the same 30%: you bought for $10,000, expecting to grow to $13,000, and it fell to $7,000. What will happen in this case? Of course, your creditors cannot be affected by incorrect forecasts.
Thus, as soon as the value of the assets reaches the size of the leverage with potential interest, the exchange automatically closes positions and makes a refund to the lender.
This amount includes the margin - funds that were originally on the balance sheet. That is, the player simply burns the deposit. In the language of traders, this situation is referred to as "margin call." You can avoid a margin call if you immediately replenish the exchange balance.
There is also another difference: if you buy a cryptocurrency for your own money, you are the owner of the currency. If you buy assets with credit funds, you will not be able to withdraw them or transfer them to another exchange.
It is important to note another fundamental difference: in conventional markets, credit support is designated as 1:10, 1:50, 1:100, while in the cryptocurrency market margin support is designated as x10, x50, x100.
It is also a very popular strategy to attract new customers.
Crypto lottery
Such lotteries are not a very frequent occurrence and are just gaining a foothold in the crypto industry, but it should be noted that lotteries enable new customers to earn an initial amount of crypto for trading. It is like a bonus, which incentivizes clients to start trading.
Not frequently you will also encounter crypto games, which are also designed for a player to earn an additional bonus. Upon completion, a trader is given a welcome bonus, which is enough to start trading.
Conclusion
Crypto companies use a wide variety of strategies to increase the number of traders. Like every industry, marketing is the key to increase your earnings and popularity.
