Carry trade: How it works and why crypto traders are interested...
The carry trade is a new concept for many crypto traders today but it’s a rather old concept that has proved it’s a success over the year. Carry trading really took off between the years 2004-2008 between the Japanese yen and the United States Dollar. At this time, interest rates in Japan were around 0.5% and not moving at all. Meanwhile, in the United States, the Federal Reserve raised interest rates from 1% all the way to 5.25%.
Investors saw this as a unique opportunity to borrow yen and fund USD-based investments. Eventually, the yen weakened 20% against the dollar and huge profits were made. Interest rates have changed over the years, making the yen-dollar carry trade mostly a thing of the past but it’s found new life in the crypto community.
Crypto traders go crazy over “the crypto carry trade”...
Today’s financial climate sees banks in Europe with historically low-interest rates. As a result, crypto traders are taking advantage of this in growing numbers using the “crypto carry trade” strategy. Low-interest rates mean traders/investors have more incentive to buy assets for-profit and less incentive to keep their fiat in traditional banks where they will not grow. Hence, many crypto enthusiasts in Europe are now taking their “cheap” fiat and exchanging it for crypto. One particular cryptocurrency platform is making this even more attractive with high-yield savings accounts.
Cryptocurrency platform embraces the crypto carry trade with a high yield savings account...
Cryptocurrency platform YouHodler is fully embracing the crypto carry trade by offering an industry-best 12% APR on stablecoin deposits. These high yield savings account means investors can take their cheap fiat, convert it to a stablecoin like USDT and then earn 12% a year, risk-free.
This platform even has additional tools like Multi HODL that take a fraction of the profit earned on savings accounts to make riskier investments for higher profit if the user chooses to go that route. With low-interest rates here to stay in Europe, more crypto traders and HODLErs are flocking to cryptocurrency platforms like this one to take full advantage of the fiat to crypto carry trade. It may be a secret now, but it won’t stay that way for long.
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Author: Matt Miller
London News Desk
Via NEWSROOM | Crypto Press https://ift.tt/2Bf4SKE
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