To answer the question: can BTC really be a safe haven? we'll have to find out what is the main problem that keeps it far away from being one?
In my opinion, this is VOLATILITY. So what forces BTC to make such large price movements?
It turns out that the biggest problem is the extreme leverage on cryptocurrency markets, which is offered by unregulated offshore exchanges.
BTC is highly concentrated and data show that almost 95% of BTC resources belong to a relatively small number of addresses. Such conditions give the market a 'kick' and increase greed.
At the same time, many traders who are using highly leveraged trading platforms have a very high-risk appetite and not always the skills needed to play with 100 or 200X leveraged trades.
BTC ADDRESSES % COINS USD %COINS
https://bithub.pl/wiadomosci/bitcoin-na-lasce-algorytmow-dlaczego-btc-i-safe-haven-to-na-razie-zwykla-mrzonka/
Most exchanges that offer trading with very high leverage were not designed to handle not only the large-scale volumes in times of heavy market congestion but also the network traffic itself.
The problem of overloading exchange servers has become very common in the last two years. It is ironic that such things happen, of course, at times when markets tend to increase their trading volume drastically. This is a big problem, as we have seen lately, because it makes it difficult for traders to reduce their exposure, when such an event occurs, leaving them at the mercy of aggressive liquidation algorithms.
We have to remember that regulated exchanges only offer around 3 times leverage.
Crypto exchange insurance funds act both as an external picture of the exchange's success, but also as a measure of how aggressive and harmful their liquidation algorithms are for the traders.
This is because on almost every crypto exchange the insurance fund is capitalized from the liquidations of traders' positions.
100x leverage and higher 200X is attractive (at least at first glance) for a trader who wants to maximize profits with a minimum contribution of his own capital, but it causes this insane BTC price volatility, which prevents the profitable use of such high leverage. If the plug by Bitmex would not be pulled out on time a few weeks ago, BTC price would fell to 0$.
How could this happen? Isn't this still too early for such high leverage 100 or 200X in the crypto market?
https://hacked.com/bitcoins-price-recovery-stalls-as-bitmex-shuts-down-u-s-accounts/
In my opinion, only because of this Bitmex incident it would be wise to limit the widely available throughout the ecosystem high leverage to stop this absurd volatility and give a chance to BTC to be this safe haven finally!!!
Source: https://bithub.pl/wiadomosci/bitcoin-na-lasce-algorytmow-dlaczego-btc-i-safe-haven-to-na-razie-zwykla-mrzonka/
In my opinion, this is VOLATILITY. So what forces BTC to make such large price movements?
It turns out that the biggest problem is the extreme leverage on cryptocurrency markets, which is offered by unregulated offshore exchanges.
BTC is highly concentrated and data show that almost 95% of BTC resources belong to a relatively small number of addresses. Such conditions give the market a 'kick' and increase greed.
At the same time, many traders who are using highly leveraged trading platforms have a very high-risk appetite and not always the skills needed to play with 100 or 200X leveraged trades.
BTC ADDRESSES % COINS USD %COINS
https://bithub.pl/wiadomosci/bitcoin-na-lasce-algorytmow-dlaczego-btc-i-safe-haven-to-na-razie-zwykla-mrzonka/
Most exchanges that offer trading with very high leverage were not designed to handle not only the large-scale volumes in times of heavy market congestion but also the network traffic itself.
The problem of overloading exchange servers has become very common in the last two years. It is ironic that such things happen, of course, at times when markets tend to increase their trading volume drastically. This is a big problem, as we have seen lately, because it makes it difficult for traders to reduce their exposure, when such an event occurs, leaving them at the mercy of aggressive liquidation algorithms.
We have to remember that regulated exchanges only offer around 3 times leverage.
Crypto exchange insurance funds act both as an external picture of the exchange's success, but also as a measure of how aggressive and harmful their liquidation algorithms are for the traders.
This is because on almost every crypto exchange the insurance fund is capitalized from the liquidations of traders' positions.
100x leverage and higher 200X is attractive (at least at first glance) for a trader who wants to maximize profits with a minimum contribution of his own capital, but it causes this insane BTC price volatility, which prevents the profitable use of such high leverage. If the plug by Bitmex would not be pulled out on time a few weeks ago, BTC price would fell to 0$.
How could this happen? Isn't this still too early for such high leverage 100 or 200X in the crypto market?
https://hacked.com/bitcoins-price-recovery-stalls-as-bitmex-shuts-down-u-s-accounts/
In my opinion, only because of this Bitmex incident it would be wise to limit the widely available throughout the ecosystem high leverage to stop this absurd volatility and give a chance to BTC to be this safe haven finally!!!
Quote
Until the crypto exchanges attempt to solve this problem, bitcoin will not free itself from the framework of being a spinning toy towards a resource of true interest for traditional market players.
https://bithub.pl/wiadomosci/bitcoin-na-lasce-algorytmow-dlaczego-btc-i-safe-haven-to-na-razie-zwykla-mrzonka/Source: https://bithub.pl/wiadomosci/bitcoin-na-lasce-algorytmow-dlaczego-btc-i-safe-haven-to-na-razie-zwykla-mrzonka/
Personally, I like to earn money and buy coins from panics for fractions of their value. Subsequent increases are merely the icing on the cake ".
Personally, I always set positions without leverage. If everI decide to use the leverage only in "certain" situations and in cases positions being small fractions from the reserve of capital and leverage at levels on the order of 2-3 times, and max. 5-10 times with "certainty". Personally better I achieve results, and without unnecessary risk, by trading the traditional method: cheap to buy, and quite expensive to sell, after waiting patiently or on "needles".
Protection already of owned capital should be more important than its possible multiplication. and disturbance of the balance between capital protection and risk taking - it is alreadypure gambling. And you don't earn on gambling (!). This is how trading differs from gambling - Common sense
and an approach completely devoid of unnecessary (!) Emotions, which disturb perception. For pure Joy; D the time will come when we will see the effects of this cool, common sense trade and when we reward ourselves for these effects. When we pay a fraction of the yield, reinvesting the multiplied capital.