The Daily Hodl
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
The Daily Hodl
No Result
View All Result

BlockTower Capital Exec Spells Out Crypto Risk Management: ‘Outside of BTC, It’s Tough’

by Daily Hodl Staff
June 29, 2019
in Trading

Ari Paul, the chief information officer at crypto portfolio management company BlockTower Capital, just dropped a thread on risk management in today’s crypto market. Paul, who has a background in derivatives trading and institutional investing, says the market’s evolution since 2017 has introduced various liquidity options.

“I wrote this thread on crypto risk management (and how it basically didn’t exist outside of holding cash) in mid-2017. Since then, a variety of low-risk hedging options have been born with decent liquidity.

CME futures provide an easy and low-risk way to establish short exposure to BTC. LedgerX provides decent liquidity for trading BTC options, and OTC desks are starting to offer tighter markets and more liquidity on the same.

Outside of BTC, it’s tough. You can borrow ‘physical’ assets from some lending desks and short them, but this entails some counterparty risk and is a minor operational hassle to execute. But a reasonable choice for smallish amounts (<$10m) for top 10 coins.

You can short on many exchanges, but lots of risks here. As Poloniex recently showed, exchange lending markets may cause unexpected losses due to liquidation mechanics. Levered shorts routinely get wiped out by ‘stop hunting.'” 

US crypto exchange Poloniex reported a sudden, severe price crash in the CLAM market on May 26. It generated roughly $13.5 million (1,800 BTC) in losses for.4% of the exchange’s customers as a number of margin loans defaulted.

Says Paul,

“And the exchanges that currently provide levered shorting are very risky in terms of counterparty risk. You can’t cold storage a short position. So for now, BTC is easily hedgable, most other things are not. The defi stack provides some options for hedging Ethereum assets.” 

Exchanges are continuing to explore new ways to offer liquidity and leverage for traders as institutional investors enter the market. On Tuesday, the US Commodity Futures Trading Commission set the stage for the first Bitcoin futures product in the US that’s settled in Bitcoin. It approved the launch of physically-backed Bitcoin futures contracts from US-regulated Bitcoin derivatives exchange and clearinghouse LedgerX.

Leading cryptocurrency exchange Binance executed its first margin liquidation on Friday, June 23rd.

You can check out Paul’s original thread here.

[the_ad id="42537"] [the_ad id="42536"]
Check Latest News Headlines


 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Submit a Press Release

Industry Announcements

  • Narwhal Finance Secures $1 Million in Seed Funding Led by Animoca Ventures
    March 24, 2023
  • Sports Prediction App Pooky Launches Full Version of Its Play-and-Earn Game
    March 23, 2023
  • StormGain Launches StormGain DEX for User-Friendly Decentralized Crypto Trading
    March 23, 2023
  • KyberSwap Announces First-Ever ARB Token Liquidity Pools, Liquidity Mining and Trading Campaigns on Arbitrum
    March 22, 2023
  • Metacade Presale Hits Final Stage Before Listings, Raising Over $500,000 in Under 24 Hours
    March 22, 2023
  • Yesports Launches the Largest Esports Marketplace for Gaming Expansion Into Web3 Alongside 40+ Partners
    March 21, 2023
  • Metatime Raises $11M in Private Funding To Enhance Web 3.0 Ecosystem
    March 21, 2023
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$27,675.42
$27,675.42
2.55%
Ethereum
$1,755.01
$1,755.01
3.66%
Cardano
$0.363006
$0.363006
1.45%
XRP
$0.449503
$0.449503
2.17%
Dogecoin
$0.075357
$0.075357
2.24%

Spotlight

  • 6 Ethereum Altcoins Targeted By SEC Ahead of Coinbase Wells Notice
    March 22, 2023
  • White House Says ‘Bitcoin Has Not Announced Plans to Adopt Proof-of-Stake’ in Wild Economic Report
    March 22, 2023
  • The String Theory of Bitcoin Predicts Two More Months of Price Rally
    March 22, 2023
  • Bitcoin Currently Witnessing Its Best Marketing Campaign Ever, According to InvestAnswers – Here’s Why
    March 23, 2023
NBX Warsaw Summit Banner
DON'T MISS A BEAT
Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options
By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.
Featured Image: Shutterstock/Billion Photos

Cryptocurrency news and analysis, covering Bitcoin, Ethereum, Ripple, XRP, altcoins and blockchain technology

Categories

Bitcoin • Ethereum • Trading •
Ripple and XRP • Altcoins •
Blockchain • Regulators •
Scams • Crypto101 • HodlX •
Futuremash •
Industry Announcements

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT | ADVERTISE

JOIN US ON TELEGRAM

JOIN US ON TWITTER

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2023 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX

© 2023 The Daily Hodl