Topic: Long term investing - Spot, Margin or Derivatives? - page 3. (Read 452 times)

Investment for the long term which I think is very safe and comfortable of course I choose to invest in the Spot Market and choose the Binance platform to hold altcoins there,
I choose the Spot market because I'm used to trading there, and for derivatives and margin I still don't understand it, it's just that it's a little more complicated.

Based on the title you made, long term investment means that the investment you buy is not used for any other reason except for holding it for a certain period so you have to hold it without being used for trading.

I don't think it has anything to do with spot, margin or derivatives because investing means holding, as I said. This benefits many people who do not master trading, especially in analyzing market movements to avoid mistakes.

The ground you walk on is slippery, and just when you think you are standing stable, you slip and fall. Getting up is of course a difficult process, especially for those who cannot afford to lose $35k and start all over again. However, I would emphasize here that the key thing is to learn from your mistakes, and although I generally understand the need of some investors to invest in "numerous difference projects", I cannot escape the impression that they are making the same mistake again and again.

9 out of 10 such projects will fail in the long term (in less than 4 years), so it all boils down to the perfect timing of when to buy and when to sell. Everything else is speculation, including the fact that the price of Bitcoin must fall below $15k, which is not impossible, but there is also a high probability that it will not happen.

1. I think there is calculator on their site or app, might be best to use it or using this excel sheet that is downloadable here (will just code it so it wouldn't be mistakenly clicked by anyone):

2. Same as to number 1, the calculator will be best here since for a year that would occur lot of fees too on your open position.

3. Saying benefits is subjective, personally, for me, Spot has low risk compare to what does margin do but if you're correct on your position then it's totally profitable. They're apple and orange, same to be labeled as fruit but they definitely have differences.

There are different strategies that you can use. You can DCA, you can also wait until the price you want is achieved, but bitcoin may never get to $14000. If you do not DCA and bitcoin has not gotten to $14000 some weeks before halving, I will advice you to just invest.

Derivative trading is very risky, best to get specific coins like bitcoin for it. Some traders would trade shit coins and continue losing, know that altcoins are more volatile, if you increase the margin ratio, it won't be good.

You are now patient, just do not trade, best to just hold which is better. You can leave the coin after you buy it until 2025.

I will have to say this again, do not use derivative trading for altcoins, than to long it and not using more margin ratio, the best is to even buy them, move them to your noncustodial wallet.

Thanks for the advice but these are only hypothetical queries so when reading them please imagine, hypothetically, that wallets don't exist and exchanges are the only place to hold crypto.

Long term investment is not related to Spot, Margin or Derivatives.

When you invest long term, you must keep your coin in your wallet, not on exchange. If you mean Spot, Margin or Derivatives, you must store your coin at exchanges. That is bad in security for your coin and capital.

In addition, if you invest and store your coin at exchange, you can easily to go with trading because it is very convenience to trade on exchanges. Then you will change from long term investment to trading and it is bad.

I'm one of those idiots who invested in a bunch of coins/tokens at the top and lost a load of money - around $35k in total 

I sold all of my coins/tokens a few months back but I will be reinvesting in numerous difference projects again when, or if, BTC goes down to $14k - which I believe will be somewhere close to the bottom.

Since losing the $35k I started trading using ByBit Derivatives and it's helped me to understand the whole crypto scene a lot more. I lost another $5k when I first started trading but since then I've done pretty well (mainly shorting) and I reckon I'm now around $2-3k up with the trading in total. I'm still massively down overall since getting into crypto though

Anyway, regarding long term investing and whether I should use Spot, Margin or Derivatives... My plan is to invest in loads of different coins/tokens but if we just use BTC as an example...

EXAMPLE

If I purchase $1000 of BTC using the ByBit Derivatives pair BTC/USDT (i.e. using USDT to purchase the BTC) and I buy the BTC when the price is at $14k using a leverage of 2x, please can someone tell me if I've understood the following scenarios correctly:

1 - If, in a years time, the BTC price goes up from $14k to $56k, that would mean the price has multiplied by 4. That being the case, my investment of $1k USDT which I leveraged at 2x (so effectively invested $2k) will go up to $8k, resulting in $7k profit... Have I understood this correctly?

2 - If conversely the price of BTC goes down from $14k and I do not put in any kind of stop loss, at 2x leverage I estimate my liquidation price would be roughly half of $14k so around $7k (maybe just over)... is this correct?

3 - If I've understood both the above scenarios correctly, what is the benefit in using Spot or Margin? It seems to me that Derivatives does exactly the same as Spot and Margin with the added benefit of additional leverage if required! Is that not right?