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Matrixport | How to generate high profits by strategically combining holdings of BTC and ETH

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Matrixport | How to generate high profits by strategically combining holdings of BTC and ETH

This article will share the investment methods of BTC and ETH from the perspectives of risks, advantages and disadvantages, returns, and investment portfolio recommendations.

The annual cryptocurrency event, bitcoin2022, was held in Miami as scheduled this year. Smart Finance reported that during the conference, Ark Investment's CEO, Cathie Wood, reiterated her $1 million target price for Bitcoin, calling this cryptocurrency "an excellent hedge against inflation." This undoubtedly once again proves that Bitcoin is a valuable currency and can be a great choice for any investor, both now and in the future. Ethereum, the second-largest cryptocurrency by market capitalization, has also become another popular investment option with its support for multiple applications.

So how can one systematically invest in BTC and ETH while holding both at the same time? How can one manage finances to mitigate risks in the volatile cryptocurrency market? The following will share the investment strategies for BTC and ETH based on returns, difficulty, ease of use, and operational combinations.

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1. Profit from Grid Trading of ETH/BTC and Earning "Coin Profit" and "Coin Appreciation Profit"

1. Brief Introduction to the Profit Method of Grid Trading:

By setting the anticipated coin price range [top pressure point price + ideal bottom fishing price], setting the number of grids [affecting arbitrage frequency], and investing funds, one can continuously buy low and sell high within the grid range, engaging in frequent arbitrage. It is a great tool to overcome human investment fear and provide guidance for those investing in BTC and ETH in navigating the volatile market.

2. Common Choices for Grid Trading Pairs

Most people use USDT paired with other cryptocurrencies for grid trading to earn USDT. During sideways trends, choosing mainstream value coin pairs for grid trading, such as BTC/ETH/FIL/LINK, is a method for value preservation and arbitrage investment.

During intense bull markets, choosing quality altcoin pairs for grid trading can yield substantial returns. For example, during a recent bullish period, the FIL project had positive news and its rise outperformed BTC. Choosing to grid trade the FIL/USDT pair during this period would have yielded higher returns compared to other pairs. Of course, selecting mainstream coin pairs for grid trading remains a conservative and value-focused investment strategy.

During waterfall crashes, grid trading is also suitable. However, it is not recommended to choose small altcoins, as there is uncertainty whether hoarded coins will go to zero or have hope of recovering. Even if there is a rebound after the crash, whether it can outperform mainstream coins is unknown. Therefore, hoarding mainstream coins is more valuable.

3. Choosing the ETH/BTC Grid Trading Pair

Typically, grid trading yields mostly in USDT/USDC, where stablecoin profits are actual and stable. However, the shared method focuses on BTC and ETH grid trading, where profits in BTC or ETH include coin earnings and coin appreciation values. These two coins are currently the most mainstream in the cryptocurrency market, and the ETH/BTC exchange rate is relatively stable.

Here, the value difference between coins and USDT is highlighted, reflecting the mindset of cryptocurrency investors: using coins as capital to earn more money, where the capital appreciation is considered as income, rather than solely relying on stablecoins like USDT as capital and treating other coins as trading assets for profit.

Using the example of ETH/BTC grid trading pairs, such as ETH/BTC, BTC/ETH, please refer to the exchange to check the rates for accuracy. If I predict an upward trend in the ETH/BTC exchange rate, meaning ETH's rise surpasses that of BTC.

After selecting the [oscillation/rise] direction, set the exchange rate range. It's advisable to set the range based on market conditions, but not too wide to avoid inefficient use of funds affecting arbitrage frequency after setting the number of grids.

By investing in ETH/BTC grid trading, my BTC will automatically profit from buying low and selling high ETH as the ETH/BTC market fluctuates. The BTC remaining in orders will also benefit from the increase in BTC/USD price. When ETH's rise surpasses that of BTC, additional profits from ETH's faster rise will be generated.

Of course, one can also terminate the grid trading based on market conditions. At this point, the profits will be in two coins, BTC and ETH, and the corresponding profits from the rise of the two coins. This can yield profits several times higher than grid profits in USDT from BTC/USDT pairs.

If my prediction is incorrect and the short-term ETH/BTC exchange rate trend turns bearish, meaning BTC's rise surpasses that of ETH, I will buy more ETH by bottom fishing with BTC. I can choose to stop the grid trading promptly to hold BTC and ETH for observation.

In scenarios where the short-term ETH/BTC exchange rate trend is bearish, and both coins are declining, meaning ETH is dropping faster than BTC, buying more ETH through grid trading can yield higher profits when the ETH/BTC rate increases. Conversely, one can also choose the [oscillation/downtrend] direction for the ETH/BTC grid, anticipating that the current ETH/BTC rate is at a peak and will decline in the future. Expecting that in a bullish market, ETH's rise will be lower than BTC's, or in a bear market, ETH's decline will be greater than BTC's.

By investing in ETH within a certain preset range, part of the ETH can be sold high for BTC and bought low for BTC, yielding profits in BTC and ETH, or entirely in ETH.

The above premise is based on my bullish view of BTC and ETH, acknowledging the value of these two major coins.

4. Pros and Cons of Choosing the ETH/BTC Grid Trading Pair

  • Pros: A conservative and lazy investment method for those bullish on BTC and ETH, overcoming the tendency to chase highs and lows psychologically. It enables 24-hour trading without the anxiety of monitoring the market constantly.
  • Cons: The ETH/BTC volatility trend is more apparent when observed on a daily basis, meaning short-term investment returns are not as high as medium to long-term investments. It requires patience and belief in both BTC and ETH.

5. Risk Assessment

3 stars: Moderate risk, offering substantial returns for medium to long-term investments.

II. DeFi AMM Automated Market Making Investment Depositing ETH+BTC

1. Brief Introduction to AMM Automated Market Making Financial Management, Depositing ETH+BTC for Investment Returns:

The emergence of AMM has changed the traditional order book trading matching model, allowing everyone to become a liquidity provider and significantly improving trading efficiency. Profits include the LP liquidity provider's basic annualized income + token sales annualized income. Currently, high-quality platforms offering AMM automated market making with deposits in BTC+ETH can yield returns of up to 10%.

2. Pros and Cons of Choosing AMM Investment in ETH+BTC

  • Pros: Generally, AMM financial management is mature, and returns are relatively stable. For individuals holding both BTC and ETH, engaging in financial management simultaneously is a good choice.
  • Cons: It is essential to select a reliable platform for AMM investment, avoiding platforms with risks of theft. Additionally, one must bear the risks associated with DeFi contracts and income fluctuations caused by one-sided market conditions. It is advisable to deposit both BTC and ETH to avoid reduced income from a single coin.

3. Risk Assessment

2 stars: Platforms introducing AMM financial management can achieve one-click investments, estimated returns, and ensure security and authority in project selection. It is a straightforward investment process for anyone holding BTC and ETH, with the added benefit of earning a 10% annualized return while the coins appreciate.

Note: For more details, refer to this article

III. Trend Intelligence Investment in BTC, ETH

1. Brief Introduction to Profit Methods of Trend Intelligence:

Selecting a diversified asset portfolio of DeFi mining, debt, options, and other assets to construct various structured risk-reward models based on market trends for enhanced returns.

During coin price fluctuations, investing in BTC can provide a guaranteed return or corresponding returns within a range. Trend intelligence's guaranteed returns come from the platform's lending business, where deposited BTC and ETH can generate stable interest income. The platform utilizes this interest income to purchase a range of options combinations, achieving additional profits during market uptrends, namely through options trading.

Investing in BTC yields profits in BTC, and the same applies to investing ETH in trend intelligence. Trend intelligence covers both bullish and bearish directions, making it a good choice for conservative investments in BTC and ETH.

2. Pros and Cons of Choosing Trend Intelligence Investment in ETH, BTC

  • Pros: A closed investment with a holding period guaranteeing coin retention, effectively controlling the futile practice of chasing highs and lows. Investments exceeding 30 days in trend intelligence are generally excellent. Regardless of market predictions, there is a guaranteed coin-based return. If the market trend prediction is correct, the coin-based returns can be even more substantial.
  • Cons: Overall average return rate of 5% to 8%; individual market fluctuations are where the returns are significant, and trend products exceeding 30 days are uncommon.

3. Risk Assessment

1 star: Understanding that trend intelligence selections are among the safest DeFi projects, with virtually no asset security risks.

IV. Investment Portfolio Recommendations

Of course, if you have fewer coins, there's no need for a portfolio; choose one and stick with it.

Conclusion

Digital currency investment is a game for believers in value. Holding both major coins BTC and ETH and engaging in portfolio investment allows you to harvest opportunities in the market without the need to monitor it around the clock.

The investment examples mentioned are from the matrixport app for financial management. Grid trading can be found under the app's Trading section, AMM under the app's DeFi section, and trend intelligence on the app's homepage.

MatrixportOfficial Website:https://www.matrixport.com/zh-tw
Matrixport AppDownload Link:https://invest.matrixport.com/newRegister/cn?invite_code=WQLKSG
MatrixportOfficial Community:https://t.me/matrixportTW