What are crypto traders doing when volatility is gone? Mint – Mint

Bitcoin’s volatility gauge has fallen to its lowest level since April in recent days, reaching 61 on Friday. This is a far cry from the 140 reached in May during the collapse of the Terra stablecoin ecosystem. After reaching an all-time high of nearly $69,000 in November, the largest digital asset by market value has been trading around $20,000 since June.

Which raises the question: what exactly are crypto traders and investors, accustomed to the twisted and ordinary property class, are doing now to make money?

Bloomberg News spoke to several investors and traders about what they are doing to survive the cold. Anyway, here’s a list of the latest strategies:

Sales options

Julian Koh, co-founder and CEO of Ribbon Finance, a protocol for Diffie’s structured investment products, said his company has “increased interest in selling options,” which can make money on the side market. RIBAN (a crypto term used to refer to funds invested in a project) hit $100 million in total value last month, up from $70 million, and alternative deposits are “doing well in this area,” says Koh.

“It’s basically a way for people to express their view that markets are going to remain flat and they’re still going to make money,” he added.

Pinching

Steven McClure, co-founder and chief investment officer at digital-asset fund manager Valkyrie Investments, has been risk-averse for most of the year. But whenever it hits between $17,000-$18,000, he says it’s a buy bitcoin. “That’s when we shop. We are waiting for those opportunities,” he said in an interview. But he is seeing “good opportunities” in holding certain properties. For example, Avalanche is his favorite brand because he took a big hit earlier in the year. You can currently earn 8% by buying and holding it.

Still, given how uncertain things are, McClellar has shifted some of the firm’s assets to cash. “Sometimes doing nothing is a great strategy,” he says. Some of his strategies are more than 50% in cash. That could include a stablecoin like the USDC or Gemini token, but it could also mean straight, old money.

Playing the long game

According to Zaheer Ebtikar, portfolio manager of crypto fund LedgerPrime, with where Bitcoin is currently trading, going long makes sense. “The market conditions I’m looking at tell me that a lot of people are going the other way, so I think the expected price is for me to go long,” he said.

He noted a “vol crack” in the market, which he likens to bitcoin’s final push event in 2020. But at some point volatility “will become very attractive, the range will break and the key will rise again.”

“That makes it very attractive to get long volatility because then you can make money if the range breaks if you think there’s another catalyst,” he added.

‘Distressed – property market’

One of the consequences of the crypto slump is that many DAOs — decentralized autonomous organizations that allow holders to vote on different proposals — are “sitting on top of distressed treasuries,” said Michael Safai of Dexterity Capital, a proprietary trading firm. Their value is below their treasury value.

“So the game is like, hey, can I convince him to withdraw the rest of the DAO treasury and then pay? If I do that, the liquidation price will be higher than what I’m paying,” he said on Bloomberg’s “What Happens” podcast. “That’s because crypto prices are sometimes irrational,” he said, adding that he’s seen this happen recently, though his firm has never done anything like that.