Reading time: ~2 m
Experts told about what money is better to use to buy cryptocurrency in the face of strengthening or weakening of the ruble, and described a trading strategy related to exchange rate differences
The opinions of experts may not coincide with the position of the editorial board. “RBC-Crypto” does not give investment advice, the material is published solely for informational purposes. Cryptocurrency is a volatile asset, investments in which can lead to financial losses.
Experts told RBC-Crypto which currency (rubles, dollars, euros, etc.) is more profitable to pay now for the purchase of crypto assets and for what currency these assets should be sold, and also described the trading strategy associated with the difference in rates.
Rubles or dollars
Bitcoin, like other cryptocurrencies, is denominated in US dollars, which means that while the dollar in the domestic Russian market is relatively cheap, it is more profitable to buy bitcoin for rubles. It is cheaper to pay for cryptocurrencies in Russian money at a dollar rate of 60 rubles than when it costs 70 rubles or higher, says Artem Deev, head of the analytical department of AMarkets.
As for the sale, respectively, it is more profitable to sell cryptocurrencies for dollars or euros, moreover, waiting for the growth of their rates in the Russian foreign exchange market, the expert believes. According to him, with the strengthening of the Russian ruble, it is profitable to buy and hold cryptocurrencies until the dollar and the euro go up again. In such a situation, cryptocurrencies should be sold in order to get a higher profit in rubles, the expert explained.
If all calculations are made in dollars or euros, then it is worth considering the rate of the cryptocurrency itself to the dollar, the analyst says. Buy at a low cost expressed in dollars, sell again for dollars when bitcoin rises in price, Deev said.
If we talk about various foreign fiat currencies, then you need to buy cryptocurrencies in the currency in which there is rich liquidity, so as not to fall on a wide spread (exchange rate difference) and be able to exit the asset under any circumstances, said Aaron Chomsky, head of the investment department of ICB Fund.
He drew attention to the fact that due to geographical arbitrage, prices in various markets will be comparable to the exchange rate adjustment, but it is better for the investor to focus on hard currency. The expert explained that the price of bitcoin will be the same in both US dollars and Turkish liras, but it is better to trade in pairs with the first, taking into account the weakening of the growth of the USD/TRY rate by 38% since the beginning of the year and objectively less liquidity in pairs with the national currency of Turkey.
Due to the presence of introduced barriers or due to the rush demand under the influence of macroeconomic events, in some region there may be deviations of the price of bitcoin from global values, for example, the Korean “kimchi premium”. However, in the future, arbitrage traders should work, who level it, says Chomsky.
The “Kimchi Award” is the difference between the price of bitcoin on South Korean and global crypto exchanges. This concept arose in 2017, when bitcoin was traded at $ 20 thousand, and in South Korea its price rose to $ 24 thousand (20% more expensive). The reason for this was the rush desire of South Koreans not to miss the opportunity to enter the market in the wake of the rally. Later, this situation was repeated repeatedly.
According to the expert, such a premium can be associated with the only strategy that in this case can help to get a risk-free profit: buying an asset on one of the external exchanges, transferring the asset to the platform of the country where there is this premium, selling for fiat currency and converting it into the base currency. If there is a discount to the world price, and the potential profit exceeds the costs, the scheme will be reversed – the purchase of an asset in this country, its transfer to a platform in another jurisdiction, sale and conversion into the base currency, Chomsky concluded.
#counter #courses #currency #profitable #pay #bitcoin