Matrixport’s Report on Conducting Relative Value Transactions
It is reported that according to Matrixport, a cryptographic service provider, it is time to conduct relative value transactions. Traders can now buy Ethereum …
It is reported that according to Matrixport, a cryptographic service provider, it is time to conduct relative value transactions. Traders can now buy Ethereum call options and provide funds for them by selling Bitcoin call options, with considerable profit potential. Markus Thielen, director of research and strategy at Matrixport, said in a report to clients on Tuesday, “This allows traders to buy high-volatility assets (Ethereum) at the price of low-volatility assets (Bitcoin).”
Research director of Matrixport: The current market can sell Bitcoin call options to buy Ethereum call options
Analysis based on this information:
Matrixport, a cryptographic service provider, has released a report that advises traders to conduct relative value transactions, which involves buying Ethereum call options and providing funds for them by selling Bitcoin call options. Markus Thielen, director of research and strategy at Matrixport, explained that this trade allows traders to buy high-volatility assets (Ethereum) at the price of low-volatility assets (Bitcoin), increasing profitability.
Ethereum is a high-risk and high-reward investment, while Bitcoin is a low-risk and low-reward investment. Traders are often hesitant to invest in Ethereum due to the potential for significant losses. However, Matrixport’s relative value transaction strategy reduces the risk of loss by using Bitcoin as collateral, which helps traders earn profits while minimizing the risks of Ethereum fluctuations.
This strategy is based on the traditional finance principle of relative value arbitrage, which aims to capitalize on price differences between related financial assets. This strategy entails purchasing an asset that is relatively undervalued and selling an overvalued asset simultaneously. Thielen suggests that relative-value trading can increase profitability as investors profit from price discrepancies.
Relative value trading is particularly crucial in today’s volatile crypto market. With Bitcoin being more predictable due to its steady, slow growth, a Bitcoin call option serves as a stable collateral asset in this strategy. Meanwhile, Ethereum’s volatility makes it appealing for traders to invest in Ethereum call options.
In conclusion, cumulative growth of Ethereum has surpassed the growth in the price of Bitcoin, making Ethereum an increasingly attractive asset to trade. However, traders should also consider the risks associated with investing in high-volatility assets. Matrixport’s advice on conducting relative value transactions using Ethereum and Bitcoin call options acts as a means of reducing these risks while still increasing profits.
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