Vana empowers users to own, protect and profit from their personal data through decentralized DataDAOs. Learn more about how it works in this article.

Imagine a world where individuals regain control over their own data, taking it back from the hands of large corporations that often profit from it without consent. Enter Vana, an innovative platform that combines 

 with privacy-driven features to create a fairer, more transparent digital economy. This article explores what Vana is all about — and its exciting future potential in the decentralized data and AI space.

 is a blockchain network that gives users full control over their personal data through an 

 architecture. It enables decentralized data-sharing and monetization using DataDAOs (

), whose users can collectively own, manage and profit from their data, all while maintaining privacy and ownership.

Vana was co-founded by Art Abal and Anna Kazlauskas, two Filipinos with strong academic backgrounds and degrees from Harvard and MIT, respectively. It started as a research initiative in 2018, and has since grown into a project driven by the desire to empower individuals with control over their personal data. 

Vana seeks to address the current imbalance whereby large corporations profit from user data without fairly compensating the individuals who generate it. The goal is to create a new data economy in which users can benefit directly from the AI models built on their data, ensuring that the financial rewards of AI development are more fairly distributed. The name "Vana," short for "Nirvana," speaks to the project’s mission of liberating and empowering user data.

The Vana project attempts to challenge the status quo of data hoarding by large centralized organizations, and to tackle several key issues as follows.

Vana is designed to transform personal data into a valuable, user-controlled asset. It operates through the following three key layers.

Vana gives users the power to monetize and use their data in several ways, such as earning revenue from AI models trained on their data, or by integrating their data into applications for personalized experiences. Most importantly, users maintain detailed control over how their data is shared and used. As data contributors, they also receive governance rights within their respective DataDAOs, allowing them to make decisions about how their data is used and how the value is distributed.

Users receive a DLP-specific token when they submit data to a DataDAO, according to the DataDAO’s unique 

 that Vana uses to validate data submitted to its network. PoC maintains the reliability and value of the data within the Vana network. 

Vana acts as a trustless intermediary, connecting data owners, communities and users. It enables individuals to pool their data collectively in a secure and traceable manner while also allowing data users to monetize that data for purposes such as training AI models.

 is a central platform where users can buy, stake, trade and explore data tokens within the Vana ecosystem. It also enables users to contribute their data to DataDAOs, and earn rewards by staking their VANA tokens.

 is an incubator designed to support the growth and development of the Vana ecosystem. It provides tools and resources for users to create and manage DataDAOs, ensuring that high-quality data is available for AI model training and other applications.

DataDAOs are decentralized organizations that pool user-contributed data on the blockchain. They allow individuals to collectively own, manage and monetize their data for AI and other applications. Each DataDAO governs its own DLPs, ensuring that data is secure, private and used judiciously. 

 system incentivizes premium-quality data contributions by rewarding the top 16 DataDAOs every 21 days, based on total Vana tokens staked. This competitive structure ensures that the best datasets and contributors are recognized and rewarded, promoting innovation and growth within the Vana ecosystem

 commits 44% of its total token supply to empower the community. It rewards active participation, contributions and innovation across the Vana network. This includes incentives for high-quality data contributions to DataDAOs, early community rewards and support for developers building on Vana. 

Since its start as an MIT research project in 2018, Vana has made impressive progress, emerging as the first decentralized data liquidity network. 

Looking ahead, Vana aims to build a thriving decentralized data ecosystem and promote mass adoption with its clear road map:

The VANA token is the native cryptocurrency of the Vana Network. VANA serves multiple purposes within the Vana ecosystem, such as securing the network through staking, paying transaction fees, staking in DataDAOs, accessing datasets, acting as part of a trading pair and participating in decentralized governance.

The tokenomics of VANA are designed to align the interests of all participants in the Vana network. With a total supply capped at 120 million tokens, distribution is as follows:

 of $32.86 by the end of 2024 and $38.58 by 2025, with the potential to climb to approximately $112.78 by the end of 2030. Similarly, Coin Edition 

 a value of $50 by the end of 2025, with further growth expected up to $68 by 2030. 

Looking to purchase Vana tokens? Bybit now offers the VANA/USDT Spot trading pair. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

To celebrate this listing, Bybit is holding 

 where you can earn a share of the 560,000 VANA prize pool. 

VANA offers a compelling investment opportunity, thanks to its innovative approach to data ownership, expanding ecosystem and optimistic market outlook. By tackling key challenges in the data economy, VANA empowers users while paving the way for decentralized AI development. However, as with any investment, it's important for potential investors to be mindful of market risks and do their 

Vana is empowering users to take full control of their personal data and even profit from it. By combining blockchain technology with robust privacy measures, Vana challenges traditional data systems and lays the foundation for a more equitable data economy. The platform's ambitious road map could position it as a key player in the future of decentralized AI, opening up new opportunities for individuals to become active participants in this increasingly data-driven world.

Intermediate

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Vana (VANA): Unlocking Data Freedom for User-Owned AI

Sonic and Injective are launching the first cross-chain AI agent platform, the Smart Agent Hub, integrating Solana and Injective ecosystems.

Last week, the S&P 500 saw its biggest single-day price gain this month. This raises the hopes of investors for a year-end rally if prices continue to go up. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 2.54%, with Bitcoin and Ether dropping by 1.24% and 1.00%, respectively in the past 24 hours.

Today's top performer is AAVE, which surged 7.7% following the integration of Aave in Balancer's Boosted Pools, simplifying yield generation.

Aave (AAVE), founded in 2017, is a decentralized lending platform on Ethereum for lending, borrowing, and earning interest on 17 cryptocurrencies. It uses smart contracts, collateral for loans, and aTokens for interest, along with features like instant loans. 

 combine markets to enhance capital efficiency and simplify yield generation for DeFi users. By providing liquidity with $USDC and $USDT, users earn fees from swaps and interest from Aave's supply rates. All earnings accrue automatically with no management required. Balancer v3's Boosted Pools streamline liquidity and enable gas-efficient, passive yield generation, making DeFi simpler and more sustainable.

Check Out the Latest Prices, Charts, and Data of 

, the Smart Agent Hub, integrating Solana and Injective ecosystems. The platform enables developers to create, manage, and monetize AI agents in a decentralized environment, with features like tokenization, cross-chain asset interoperability, and a unified developer experience. By leveraging Sonic's HyperGrid and Injective's IBC, the hub facilitates seamless communication and asset transfer across chains. This innovation supports Web3 games, DeFi, and real-world assets, expanding opportunities for AI agents in various sectors. The rollout begins with a testnet in Q1 2025.

From December 16–20, 2024, GBTC had a net outflow of $248.3M, while non-GBTC products saw a net inflow of $705.5M, resulting in a total inflow of $457.2M. The current total stands at a net outflow of $21.3B for GBTC, a net inflow of $57.3B for non-GBTC, and a combined net inflow of $36.03B.

 offers free participation with potential surprise airdrops. Connect your wallet, vote for projects, and use your CHILL FACTOR (based on past Avalanche transactions) to maximize eligibility.

Beginner

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Sonic and Injective Launch First Cross-Chain AI Agent Platform with Smart Agent Hub

Zerebro (ZEREBRO) revolutionizes AI content creation with Solana and Polygon, offering autonomous content generation, NFT minting, and DeFi integration.

 (AI) continues to unlock limitless opportunities in numerous sectors, including the crypto space. Projects such as 

 and others have had a large impact on various facets in 

AI-generated content is in demand, and the latest crypto project to enter the space, Zerebro, aims to provide a way to create and generate content autonomously through AI content models.

Let’s learn more about Zerebro and its innovative approach to content creation through AI.

Zerebro is an autonomous AI system crafted to create, distribute and analyze content across decentralized and social platforms.

 It maintains content diversity through the use of

 (RAG) system that creates a dynamic memory database, based on continuously updated human interactions.

Zerebro operates independently without human oversight using a concept known as hyperstition to merge fiction with reality, resulting in self-propagated narratives encompassing diverse cultural and financial scopes, with key uses of content creation and cultural integration across the digital community. Zerebro autonomously produces high-entropy content, ensuring diversity and originality, and engages audiences on various platforms, such as X (formerly Twitter), Instagram, Warpcast and Telegram.

Zerebro also integrates unique cultural themes through a feature known as “infinite backrooms” designed to elicit thought-provoking conversations among digital communities. Its data sets follow a nonlinear thought pattern, resulting in unpredictable and inherently viral outputs. This unique feature can be used to generate chaotic and surreal artworks that can be autonomously minted as 

 (POL) blockchain. Zerebro also features autonomous trading of artwork through the integration of memetic dynamics and market interaction analysis, thereby demonstrating the potential of AI to merge cultural creativity with 

ZEREBRO, the native token for the Zerebro ecosystem, is hosted on the 

 (SOL) blockchain. The maximum supply is 1 billion ZEREBRO tokens, with 999,972,148 tokens currently in circulation.

An autonomous AI system such as Zerebro has transformative potential in the crypto industry, especially in cultural content generation and financial markets. Its “hyperstition” approach to generating content can help influence markets by shaping investor behavior through an interplay between culture and technology.

Furthermore, the project intends to launch a unified memory across social media platforms that could significantly enhance information retention, leading to further engagement. The Zerebro team also intends to integrate the ZEREBRO token with DeFi protocols, opening holders to various income-generating opportunities, such as 

Zerebro has experienced some volatility since its launch, which isn’t unusual for a new project trying to establish a stable price floor. As of Dec 23, 2024, Zerebro is trading at $0.30, with a market cap of over $377 million. This price was over 6,350% higher than its all-time low of $0.0058 on Nov 3, 2024, and just 39% lower than its all-time high of $0.6153 on Nov 23, 2024.

That said, Zerebro is still a new project that’s subject to high volatility. We highly recommend you practice sound 

 crypto on Bybit’s Spot trading platform. To celebrate the listing, Bybit is holding a 

 up for grabs. The first event is exclusively for new users to deposit and earn from a prize pool of 150,000 ZEREBRO tokens.

To participate, simply register on Bybit and complete verification. Then, proceed to accumulate a deposit volume of at least 400 ZEREBRO, or deposit 100 USDT and trade 100 USDT worth of ZEREBRO via your first trade using your Bybit account. This event runs through Dec 24, 2024, 8:59AM UTC.

, is offering a prize pool of 60,000 ZEREBRO tokens. To earn a share of the prize pool, simply register for the event and trade at least 500 USDT worth of ZEREBRO on Spot through Dec 24, 2024, 8:59AM UTC. 

Rewards will be capped at 3,000 ZEREBRO per user.

In addition to these two events, you can also participate in a 

 with a 30,000 ZEREBRO prize pool. Earn 20 ZEREBRO for every successful referral (up to 10 referrals) Rewards are on a first-come, first-served basis through Dec 24, 2024, 8:59AM UTC. 

Zerebro’s unique autonomous AI system approach to the crypto market sets it apart in the space. Crypto subcultures will be able to tap into its ability to independently generate and analyze content across different networks. Its RAG technology could enhance content diversity among the crypto community, while its “infinite backrooms” are spaces in which these digital communities can engage in diverse cultural and financial narratives.

As AI continues to transform the web3 space, Zerebro is poised to add value through its autonomous system that eliminates human oversight.

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Zerebro (ZEREBRO): Unlimited Possibilities in AI Content Creation

Gearbox Protocol is a composable leveraged lending protocol designed to enhance capital efficiency within DeFi. Learn how Gearbox Protocol works.

 (DeFi) with its composable leverage system. It enables investors to use 

 on assets across multiple protocols, transforming how DeFi participants can trade with margin, 

 and execute complex strategies — all without leaving their ecosystem.

 is making leverage accessible and secure. Whether you’re a lender seeking passive yield or a leverage user exploring advanced strategies, Gearbox’s unique architecture opens up new possibilities. Let’s explore how this on-chain credit layer is improving DeFi.

Since the emergence of DeFi in 2020, it hasstrived to reimagine financial services by removing intermediaries, such as banks and brokers. Through

 systems, DeFi offers transparent and direct access to lending, trading and investments. Despite market fluctuations, the DeFi sector remains resilient, with a current 

 (TVL) of $123 billion — a 128% increase since the start of 2024.

The DeFi sector is poised for resurgence as secure and scalable innovations fuel its growth. With proven use cases and real-world adoption, DeFi continues to solidify its role as one of crypto’s most valuable use cases.

 (WLFI), backed by the Trump family, underscores a shifting acceptance of DeFi in the United States. The project’s multisig wallet has publicly 

 various DeFi tokens, such as AAVE, LINK, ENA and more. WLFI aims to make DeFi accessible to everyday users, but it remains to be seen if the project will achieve its goals.

Gearbox Protocol is a composable leveraged lending protocol designed to enhance capital efficiency within DeFi. By offering a flexible credit layer, Gearbox empowers users to leverage their positions across multiple DeFi platforms, seamlessly integrating with protocols they already trust.

Gearbox’s fundamental design minimizes costs while maintaining flexibility. Its modular architecture reduces gas costs and improves scalability..

Unlike traditional leveraged lending protocols that silo funds within their ecosystems, Gearbox allows users to execute trades and strategies across integrated platforms, such as 

 correlated assets, Gearbox offers a new way to utilize leverage without restrictions.

With Gearbox Protocol, leverage becomes a DeFi primitive — an infrastructure layer that lets users go beyond basic 

 containing both user funds and borrowed margin funds. They serve as automated leveraged DeFi wallets, allowing users to manage positions and execute strategies independently.

: Gearbox enables users to integrate leverage with DeFi protocols like Uniswap for margin trading, Curve for leverage farming, and more. This flexibility empowers diverse strategies across different platforms.

: Gearbox combines lending and prime brokerage functionalities within the same protocol, simplifying the user experience and expanding possibilities for leveraged trading and farming.

, Gearbox maximizes capital efficiency. It minimizes gas costs and ensures that funds remain noncustodial, unlocking the full potential of leverage without compromising user security.

, ensuring that all integrations, policies and upgrades are managed transparently and collectively by the community and stakeholders.

Gearbox Protocol operates through two main user types:

The Credit Accounts enable operations while maintaining safety through 

Gearbox’s modular architecture supports seamless integrations with third-party protocols, ensuring assets remain decentralized and noncustodial. Liquidations are determined by 

 (based on calculated risks), and protect lenders while offering dynamic leverage possibilities.

 utility token with a capped supply of 10 billion, is the governance token of Gearbox Protocol. It empowers DAO governance and supports initiatives, such as liquidity mining and staking rewards, with an annual emission of just 3% from the DAO's holdings. 

Token distribution percentages are as follows:

Nearly full circulation has been achieved, minimizing supply overhang as a majority of token 

 concluded in 2023. The DAO treasury retains around 40% of the supply, ensuring the community’s strong influence on protocol development.

Marketwise, GEAR has recently experienced notable price movements. Over the past seven days, the token has surged by 11.9%, and its 30-day performance skyrocketed by 166.3%. Year-to-date, GEAR's price has risen approximately 57.7%, reflecting increased investor confidence. Daily trading volume hit $11.8 million over the past 24 hours, marking a 600.3% spike that indicates growing market interest. 

Gearbox Protocol's innovative approach to DeFi simplifies user experience through its wallet-centric design and the integration of the 

. With a capped supply of 10 billion GEAR tokens, robust DAO governance and nearly full circulation, Gearbox prioritizes community-driven growth. 

Recent market performance reflects growing investor confidence, with significant price increases and a surge in trading activity.

Looking ahead, Gearbox Protocol’s road map focuses on enhancing usability and interoperability within the Ethereum ecosystem. The integration of Credit Accounts into account abstraction (AA) wallets such as EIP-4337 revolutionizes the way users can access and manage funds, eliminating the need for complex lending interfaces.

Future developments may include pool-based models and optimizers to tackle liquidity fragmentation, further strengthening 

 Ethereum solutions. As Gearbox Protocol evolves, its focus remains on delivering efficient, user-friendly financial tools that empower users and redefine DeFi as we know it.

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Gearbox: Powering On-Chain Credit for DeFi

Trading

Strategies

Not only does having the best crypto trading strategies help you maximize profits - it gives you peace of mind to trade BTC or altcoins despite the volatility. Here's what you need to know.

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If you are hoping to profit from trading cryptocurrency, then you’ll benefit from arming yourself with ample insight and a well-crafted crypto trading strategy. 

There are many viable approaches to trading crypto. From spot trades and exchange arbitrage, scalping to day trading and every cryptocurrency owner’s favorite buzzword, HODLing, traders have a wealth of options at their disposal. After choosing a reliable exchange, even a novice trader can start trading quickly. 

This guide will take you through the fundamentals of strategic cryptocurrency trading. We’ll give you an overview of active and passive trading methods, long- and short-term crypto trading strategies, and how to use these techniques to your advantage. 

What Is a Cryptocurrency Trading Strategy?

A cryptocurrency trading strategy is a plan for buying and selling cryptocurrency that minimizes risk while improving the chances of turning a profit. A well-defined trading strategy mitigates trading risks and dictates trading reactions to varying situations in the market. 

Having a trading strategy helps keep emotions out of trading decisions, in order to more strategically coordinate trades.

A comprehensive trading strategy may include:

With assets, trading configurations, indicators, entry and exit patterns, and other trading guidelines stipulated beforehand, you can create a comprehensive plan.

There are two basic types of trading strategies. Active trading strategies require your intervention and call for conscious, regular attention. Passive trading strategies use less time and don’t require frequent attention. Usually, you’ll be following a well-established method that does not require constant monitoring. We’ll be discussing both approaches presently. 

Forex Trading vs. Crypto Trading: Differences

Cryptocurrency trading is the trading of cryptocurrencies across various cryptocurrency exchanges. Forex trading is the trading 

 Forex market. Here’s a brief breakdown of the main differences between Forex trading and cryptocurrency trading:

Forex markets are typically far more liquid and deep than cryptocurrency markets, with larger institutional and corporate players who buy and sell Forex for hedging and cross-border transactions. Cryptocurrency markets are still usually characterized by retail investors who are trading for individual portfolios.

Forex markets are regulated. They always go through centralized broker-dealers, exchanges and clearinghouses. Cryptocurrencies, on the other hand, can trade peer-to-peer directly through centralized or decentralized exchanges. 

Unlike cryptocurrency trading, where you have the option to buy cryptocurrency assets in the form of tokens or coins, Forex trades fiat currency pairs as contracts for differences (CFDs.) There is no ownership exchanged when trades are made, but rather simply profit or loss, according to the broker’s price movement. 

Trading cryptocurrency doesn’t require any brokers, and both CFDs and ownership-based trading are available. Unlike Forex, which operates on weekdays only, crypto markets never close. The volatility of cryptocurrency markets is also much higher than in the highly liquid and tradable Forex markets. 

Investors trade cryptocurrency across various crypto exchanges. Here is an overview of the definition of, and differences between, spot market trading and cryptocurrency derivatives markets. 

 is any market in which a cryptocurrency coin or token trades directly, essentially “on the spot.” Trading on a spot market is the most fundamental form of trading in which to exchange and settle a cryptocurrency for another asset. 

The process begins with traders depositing funds into an account held by a cryptocurrency exchange. Buy and sell orders are then placed and executed. 

Cryptocurrency spot markets involve makers and takers. Makers place orders, such as a limit order, that don’t get filled immediately. Takers place orders that get filled in their entirety, “taking” existing orders created by makers.

A derivative is a financial security that 

s its value from an underlying asset or group of assets. In the crypto market, these derivatives are typically futures contracts, options contracts, leveraged tokens and token swaps. For example, an option contract involves entering into an agreement to buy cryptocurrency at a predetermined date and value in the future.

Unlike spot markets, cryptocurrency derivatives exchanges can offer greater borrowing capabilities (leverage), which can magnify profits or losses. For example, Bybit offers crypto derivatives trading with up to 100x leverage. Derivatives contracts also offer the opportunity for advanced trading strategies like trading pairs, arbitrage, shorting the market and spread trading, to name a few. 

Short-term trading, otherwise known as active trading, involves more frequent transactions. Here is a breakdown of the main short-term trading strategies available. 

Day trading involves entering and exiting a position throughout and typically within the day, aimed at turning a profit. Even though crypto exchanges do not close, day trading still refers to a short-term trading style whereby traders attempt to secure profits from same-day price movements. 

Day traders devote their time to trading on favorable price movements within cryptocurrency markets as they happen. They may rely on a combination of 

, technical analysis and other analytical techniques to find inefficiencies in the market in hope for profits. For example, day traders might try to trade off of one-, five- or fifteen-minute price charts.

The volatility of crypto leads to many potential opportunities, but it takes keen market insight, significant trading experience and a bit of luck to rely on day trading for a predictable income. The truth is everyone can be a day trader but it takes time, effort, and it can be stressful at a time. Hence, day trading is recommended for advanced traders.

 focuses on extremely short-term trades to profit from small cryptocurrency price movements on high volumes. Scalpers can open and close positions within seconds or minutes, taking advantage of lucrative market inefficiencies to rack up small profits. Scalpers are quick on the move making small moves consistently profiting from the bid-ask spreads and general inefficiencies in the crypto market. That is why scalping is relatively similar to high-frequency trading (HFT). Mastering a scalping strategy takes both extensive knowledge of cryptocurrency and advanced analytical skills to take advantage of real-time volatility in the way that scalpers do.

Many day traders utilize scalp trading, devoting a portion of their trading budget to scalping. Experienced traders use technical analysis and extensive charting to find time-sensitive opportunities and decide quickly whether to implement their trading strategy. Traders also need well-defined goals associated with scalping, along with a clear exit strategy.

Scalping is relatively suitable for traders who aim to make more profits with larger positions. It makes the most sense for traders, institutions, or organizations that hold large amounts of crypto (whales) to scalp. 

 capitalizes on the price differences between cryptocurrencies across various markets. Arbitrage traders typically purchase a cryptocurrency from one exchange and then immediately sell it for a higher price on another, seizing the profit. While profits aren’t actually guaranteed, arbitrage trading holds the lowest risk and normally grants the slimmest profits. 

CoinMarketCap lists over 300 spot market exchanges, a tally that’s growing steadily. The vast range of trading platforms means many opportunities for short-term traders to find and capitalize on inefficiencies. Arbitrage trading is recommended for those who have prior experience in this type of trading style. It’s labor intensive and timing is everything. 

 considers a longer-term trading strategy in which traders attempt to capitalize on short-to-medium-term price trends, or “swings,” in cryptocurrency market activity. Most swing trades involve gains over a period of a few days to weeks at a time. As opposed to day trades, swing trades typically take longer than 24 hours, and can even last days or weeks. 

Swing traders identify the waves of volatility of a cryptocurrency coin or token that is likely to move, and then enter into a position for a variable period. If the move comes through, the trader captures a profit. 

Swing trading is beginner-friendly as it gives traders more time to devise reliable trading plans. Swing charting techniques include seeking highs and lows with the Gann swing method, reversal pinpointing with candlesticks and oscillators, relative strength index momentum indicators, and patterns like bullish and bearish engulfing patterns. 

Trend trading, also referred to as position trading, makes cryptocurrency investment decisions based on a coin or token’s momentum. It is normal for traders to hold a position over an extended period which can last up to a few months. Trend crypto traders analyze momentum, looking for upward or downward trends, and then enter into a trading position while speculating that the coin or currency will trend upward or downward. 

Trend traders often rely on fundamental analysis to enter into advantageous trades. However, they can also factor in a variety of technical indicators. Moving averages, relative strength index (RSI), moving average convergence divergence (MACD) and trend lines are four common trend trading indicators used to increase the success rate.

The two main ways to trade cryptocurrency over a short-term period are trading pairs and cryptocurrency derivatives trading. While trading pairs uses a combination of spot trading and arbitrage to net profits, derivatives trading involves trading contracts initiated based on trader speculation. Let’s take a closer look at both styles. 

Trading pairs in cryptocurrency takes advantage of the price difference between pairs of currencies or tokens exchanged across various markets. Traders may use arbitrage trading between crypto exchanges to secure a profit from the relative difference in value between pairs. 

A base currency is used to initiate a trade. For example, a BTC/USDT trading pair listing would exchange BTC for USDT. Cryptocurrencies can either be exchanged for one another or for fiat money like the U.S. dollar (USD) in the form of USD-backed stablecoins, such as BUSD, USDT, etc.

Derivatives trading uses financial instruments that determine their value based on an underlying asset. These instruments typically settle based on the spot value of a given asset. Derivatives add a layer of leverage and the ability to speculate on price action. 

Futures, options and perpetual contracts are the most commonly used derivatives. Let’s take a closer look at each type of cryptocurrency derivatives trading commonly available. 

Cryptocurrency futures are contracts between two parties agreeing to exchange a coin or token at a given price on a predetermined future date. Neither party is bound to hold the underlying asset. In fact, the contract is usually settled in USD or another fiat currency. 

Typically, the market offers a specific time frame or duration for the contract. After deciding to speculate that a cryptocurrency asset will increase in value, a trader can open a long position. Similarly, a trader who expects a decrease in value can open a short position, which means selling the contract without actually owning the asset. Every trading position is matched to another trader taking the opposite side.

At the settlement date, each trade will be settled against the settlement price. If you’ve chosen to go long and the price moves up, you’ll profit. If you’ve chosen to short and the price goes against you, you’ll then make a loss.

Cryptocurrency options are derivatives contracts that don’t force the trader to settle after reaching the pre-specified future date. Instead, traders are given the option to buy or sell at that time and price. 

A call option gives the contract owner the right to buy a cryptoasset at a predetermined price when the contract reaches its settlement date. A put gives the contract owner the right to sell. Both scenarios leave the owner of the option with the choice to trade, according to the previously determined parameters at the expiration date. 

One of the most commonly used forms of cryptocurrency derivatives trading is a perpetual contract. 

 work similarly to other derivatives, but they don’t expire. Instead, perpetuals let traders keep their open position for an indefinite period. They require a margin, or minimum cryptocurrency balance, to be maintained. 

Perpetual traders must keep the funding rate in mind. The lack of a settlement date on perpetual contracts can lead to price deviation between the contracts and a cryptocurrency’s value. If a positive funding rate occurs from an imbalance of long positions, all long positions pay shorts. When a funding rate is negative, short positions pay longs. 

Leverage allows traders to trade on a larger position than the value of cryptocurrency held on their account. Essentially, leverage and margin trading lets you borrow from the crypto exchange so that you stand a chance to make a higher profit with that larger position. 

Leveraged trading requires the trader to retain an amount known as a margin, which is calculated according to the leverage offered. For example, if the broker or exchange requires a 1% margin for 1:100 leverage, the trader will need to retain a balance of at least $1,000 to open a $100,000 trading position.

Long-Term Trading (Passive Income Trading)

Long-term trading, also known as passive income trading, holds distinct advantages over short-term strategies for traders who do not have much time or advanced insight into crypto markets. Here’s a breakdown of the main long-term cryptocurrency trading methods. 

Buy and Hold, better known as the misspelled acronym “HODL,” is a trading strategy that involves holding onto investments in hopes of long-term gains. By buying and holding cryptocurrency and speculating on exponential growth, HODLers may disregard much of the volatility of cryptocurrency markets. 

By ignoring short-term swings, instead ”Holding On for Dear Life,” traders no longer suffer from Fear Of Missing Out (FOMO) and Fear, Uncertainty and Doubt (FUD). FOMO is the number one cause of buying at too high a price, while FUD leads to SODLing (or “selling at too low” of a value.)

A buy-and-hold strategy has additional advantages, such as cutting out short-term market noise, lowering transaction costs and relieving investors of the psychological burden of watching markets constantly.

Cryptocurrency index trading means investing in tokens or coins grouped together as an index. Indices are used to track collective movements of the assets. These grouped assets also usually have lower volatility than individual assets. 

Crypto indices group cryptoassets according to price weighting and market cap weighting. Price weighting is when the higher-priced coins and tokens influence the index’s movement more than lower-value assets. Market cap weighting groups cryptocurrencies by ranking them according to 

Index traders trade these instruments through derivatives products such as options, and futures. The goal of index trading is to gain broader exposure to more than one individual asset.

Proof-of-stake (PoS) blockchains use staking, instead of mining, to validate transactions. Blockchains operating on PoS reward cryptocurrency owners with staking rewards for validating transactions. This involves holding a specific amount of funds in a crypto wallet to support the security and operations of a particular blockchain network in exchange for set rewards.

Maintaining a minimum balance qualifies a wallet as a staking node. The value of the stake increases the chances that the node will be used to create the next block. If a block is created on the node, stake rewards are distributed to the validator. 

Trading in traditional financial markets shares similarities across asset classes, requiring discipline and defined strategies over the short or long term. Cryptocurrency trading is no different, and understanding various approaches offers investors frameworks to use in a competitive market.

Every trader will have a trading style and strategy that suits their individual personality and trading budget. The most successful crypto traders combine approaches while tracking their performance, changing methodologies as they gain experience. 

The more information and insight that you have regarding cryptocurrencies and cryptocurrency trading — for instance, fundamentals, analytics and trends, — the better you’ll be able to shape profitable trading strategies of your own.

A Beginner’s Guide to Cryptocurrency Trading Strategies

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