“Volatility of the cryptocurrency market and its effects on trading strategies: study of encryption currency, currency pegs, scalping and hedera hashtograph (hbar)” *
The cryptocurrency world has experienced unprecedented instability in recent years, and prices vary wildly between days and even hours. One important factor that contributes to this volatility is the lack of a stable currency PEG, which can lead to significant price fluctuations. In this article, we deepen the concept of currency PEG, scaling strategies and their relationship to the cryptocurrency trade.
What is the currency loss?
The currency blanket is a mechanism that maintains the value of one currency in relation to the other. When a land or financial institution attaches its currency to the currency, it undertakes to replace a certain amount of currency attached to the target currency at a fixed rate. This ensures that the value of the bound currency remains stable and predictable.
Crypto Currency PEG
The Cryptocurrency market is largely available to the Currency PEG model where bitcoin (BTC) is often used as a reference point. The most famous example is the Bitcoin-USD (US dollar) PEG, which corrects the price of BTC for $ 6,000 per coin on some online stores. This ensures that merchants can easily understand and predict the value of their shops.
Scaling Strategies
Scaling strategies include a large number of small shops in a short time to utilize market variations. Scalpers aims to benefit from the rapid change in the cryptocurrency market by utilizing small differences between prices and utilizing these inefficiencies.
Some popular Scaling strategies are:
* Orientation : Identifying trends and predicting future price changes.
* Regions Trade : Buying or selling when the price is in a specific area, which allows for low and high sales.
* Average return : Betting that prices will return to average over time.
Hedera Hashgraph (HBAR)
Hedera Hashgraph is an open source, a decentralized and scalable blockchain platform developed by German cryptocurrency company Hedera Hashgraphh. Launched in 2019, HBAR aims to provide a fast, safe and energy efficient alternative to traditional blockchains.
HBAR key features
* Scalable : HBAR architecture is designed to support up to 64,000 events per second, which makes it an ideal platform for fast trading and applications.
* Energy efficiency : HBAR uses a new consensus algorithm that consumes significantly less energy compared to traditional work certificate (POW) algorithms.
* Intelligent contracts : HBAR supports the creation of smart contracts with its original encryption technology, HBAR.
relationship between cryptocurrency prices, currency pins, Scalping and Hedera Hashgraphi
Although HBAR is a separate entity with its own architecture and features, it can be integrated into various strategies of cryptocurrency trade. The most important relationship with this monitoring is the effect of currency Pegs on relative strategies:
* Price stability : When the currency blanket is in place, it provides a price perception for merchants who rely on it as a reference point.
* Risk Management : Currencies can help control the risk by limiting possible losses from high price fluctuations.
However, if the PEG of the currency comes off the background or becomes more evaporated due to external factors (eg central bank activities), Scaling strategies may need to adapt to these changes. Here Hedera Hashgraph comes to the game:
* Distributed Financing (Defi) : HBAR’s architecture enables the creation of Defi applications that operate on its blockchain, allowing for decentralized quote, borrowing and trading.
