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The basics of risk management when trading cryptocurrencies

Types of risks

With any financial transactions there are risks, of the varieties of which there are many.

For example:

  • market risk — the risk of unfavorable changes in the value of the asset;
  • credit risk is the risk of bankruptcy of the Issuer of the cryptocurrency or its failure to perform the assumed payment liabilities;
  • liquidity risk — the risk of failure to convert the whole amount of positions in the fiduciary currency (or equivalents) at the best prices;
  • operational risk — risk of inability to trade or I/o assets.

These and many other risks affect the performance and stability of financial markets and individual participants. When a financial institution or the Corporation does not fulfill its obligations, get losses from transactions with financial assets or operating activities, this has a negative impact on the prices of related assets. This situation usually is contrary to the interests of stakeholders.



The correlation between cryptocurrency and traditional market

bitcoin Ethereum Ripple

Considered to be, one of the key advantages of cryptocurrencies as an investment — the lack of correlation with most other asset classes. Is this still true, later 10 years after the advent of bitcoin (Bitcoin)?

The investment analysis of bitcoins is based on many factors, but the most important of them is the price, volatility and correlation with other asset classes. In this case, if the price and volatility of bitcoin and write a lot, the correlation I draw much less attention, in vain, given, how important is the correlation analysis for investors, using scriptactive to diversify portfolios.



VanEck and SolidX filed a joint application to launch a bitcoin ETF

Two new York firms, which in the past have unsuccessfully tried to obtain permission of the Commission on securities and stock exchanges of the USA for the opening of OTC investment bitcoin-funds, decided to combine efforts, submitting a joint bid to launch a regulated cryptocurrency ETF. About it reports Wall Street Journal.

The appropriate application was submitted to the SEC on Wednesday, 6 Jun. New ETF got the name VanEck SolidX Bitcoin Trust will be insured against theft and loss of access to funds. Also it will be linked to the new index from Van Eck, is that exchanges will collect the price of bitcoin with the US-based OTC (OTC) platforms.

Notable for a relatively high share price VanEck SolidX Bitcoin Trust – their size, as stated in the application, set at $200 000. Thus, we can conclude, that new ETF will primarily target institutional, and not retail investors.

This was confirmed and CEO of SolidX Dan Gallancy, ., that representatives of the SEC have repeatedly expressed concern, what cryptocurrency market bears higher risks for retail investors.



Overview of the US stock market: Top news of the week 26.02.2018

The main news of the week the US stock market:

The fed Chairman Jerome Powell first appears on Capitol hill in his new job 27 Feb. The attention of investors back to corporate reports.



Overview of the US stock market: Top news of the week

The main news of the week the US stock market:

Important reports:

Monday: Arconic (NYSE: ARNC), Skyworks Solutions (NASDAQ: SWKS) , Cirrus Logic (NASDAQ: CRUS)

Tuesday: Chipotle (NYSE: CMG), Gilead Sciences (NASDAQ: GILD), Disney, General Motors (NYSE: GM)

Environment: Tesla, Yelp (NYSE: YELP), Michael Kors (NYSE: KORS), Take-Two Interactive (NASDAQ: TTWO), Softbank (OTCPK: SFTBY), Zynga (ZYNGA) , Hasbro (NASDAQ: THESE)

Thursday: Nvidia (NASDAQ: NVDA), Twitter, Activision Blizzard (NASDAQ: ATVI), Pandora (NYSE:P), FireEye (NASDAQ: FEYE), Viacom (NASDAQ: VIAB) , CVS Health (NYSE: CVS)

Friday: CBOE Holdings (NYSE:COE), The ImmunoGen (NASDAQ:IMGN) , PG&E (NYSE:PCG)

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