Imagine your exposure to profits is not just doubled, but squared!

Think about the one thing that keeps traders up at night — the sword of liquidation hanging over. BTC², with its ingenious in-kind funding mechanism, effectively shields you from liquidation.

In simple terms, it’s a way to exponentially increase your potential returns. Not just riding the waves, but harnessing their energy.

Linear is a snail; quadratic is a cheetah.

Before we move further, let’s tackle this: what does quadratic price exposure mean? How does it change the game?📈

Quadratic price exposure means that your gains or losses are not in direct proportion to the market’s movements, but are instead related to the square of those movements. In simple terms, as the market moves, your profits or losses accelerate at a much faster rate than the market itself.

For example, with linear exposure, a 10% increase in the market would result in a 10% gain for you. With quadratic exposure, a 10% increase in the market would result in a 21% gain.

But how does this seismic shift come into play? It’s not magic, it’s mathematics. This concept plays with the power of squares; your profit potential is linked to the square of the price movements. The bigger the market movement, the disproportionately larger your gains.

Read the Whitepaper here.

This changes the leveraged trading landscape drastically because it amplifies the potential returns, allowing traders to capitalise on even small market movements.

For advance traders, this provides an opportunity to create more dynamic and potentially lucrative strategies, especially in volatile markets where price movements are substantial. It adds a new dimension to trading, giving traders the tools to not just participate in the market, but to potentially achieve outsized returns.

Let’s explore some use-cases and advantages of using BTC², which allows traders to experience quadratic price exposure without the fear of liquidation.

Technical Day Trading:

Use Case: A day trader looking to capitalise on intraday price movements employs BTC² to gain quadratic exposure to Bitcoin’s price. With an eye on technical indicators, the trader takes positions in anticipation of minor price moves.

Advantage: The quadratic exposure amplifies gains even from small price movements. The elimination of liquidation risk empowers the trader to focus on strategy without worrying about market fluctuations wiping out the position.

Dynamic Portfolio Allocation:

Use Case: A portfolio manager dynamically allocates a portion of a diversified portfolio to BTC² as a non-correlated asset to provide higher yield opportunities in various market conditions through the funding rate mechanism.

Advantage: The quadratic nature of BTC² provides a powerful tool for magnifying returns during favourable market conditions. The elimination of liquidation risk ensures that the portfolio isn’t susceptible to abrupt closures in positions during volatile markets.

Automated Trading Algorithms:

Use Case: A quantitative trader deploys algorithms that can detect patterns for potential breakouts in the price of Bitcoin. By using BTC², these algorithms can take positions which have the potential for exponentially higher gains due to quadratic exposure.

Advantage: The algorithms can capitalize on small movements with greater effect, and the elimination of liquidation risk allows the algorithms to trade more aggressively and optimize profits.

BTC² is not just another crypto asset; it is a paradigm shift.

#bitcoin traders often encounter the liquidation risk challenge when trading with leverage or Margin. SquaredLab presents an #innovative solution: the BTC² Perpetual Index. This revolutionary offering eliminates #liquidation #risks while ensuring #leveraged payouts.

Simplifying BTC² Perpetual Index

BTC² is a unique #index that tracks the square of the #Bitcoin #price. In simple words, if Bitcoin is priced at $100, BTC² will be at $100 x $100 = $10,000. This squared relationship helps #traders gain exposure to #Bitcoin’s price movements in a different way compared to the conventional #trading methods.

The Magic Behind It: No Liquidation

A fascinating aspect of BTC² is how it utilises Zeno’s Dichotomy Paradox to avoid liquidation.

If you’re not familiar with Zeno’s Paradox, think of it like this: Imagine you’re trying to walk to the other side of a room. But instead of walking straight there, you decide to first walk half the distance, then half of what remains, then half of that, and so on. Practically, you keep getting closer but never actually reach the other side because you’re always halving the distance.

Now, let’s apply this to #BTC². Imagine your investment as the distance you need to walk across the room. With BTC², even if the market is falling, your losses are halved in a way similar to Zeno’s Paradox. This means you never hit absolute zero; there’s always a fraction left. This ingenious approach gives you the cushion to bounce back if the market turns in your favour later, protecting you from complete liquidation. It’s like the market giving you infinite chances to reach your destination.

Scenario Analysis — Deeper Look

Let’s now dive deeper into various scenarios imagining BTC trading at $ 100 to see how BTC² operates compared to a traditional 2x leverage position.

Index #price of BTC² is calculated a below for BTC trading at $ 100,

BTC² = BTC * BTC

100² = 100 * 100

BTC² Index price = 10,000

Scenario 1: Bitcoin goes up 10% to $110

BTC²: The new value with quadratic exposure will be 110² or 12,100= 21% Increase. Initial value was $100, so the final value is $121.

2x Leverage: The 10% increase is doubled to 20%. Initial value was $100, so the final value is $120.

Advantage of BTC²: Slightly higher gains compared to the 2x leverage due to the quadratic exposure.

Scenario 2: Bitcoin goes down 10% to $90

BTC²: The new value with quadratic exposure will be 90² or 8,100= (-19%) decrease. Initial value was $100, so the final value is $81.

2x Leverage: The 10% decrease is doubled to 20%. Initial value was $100, so the final value is $80.

Advantage of BTC²: Slightly lower losses compared to the 2x leverage due to the quadratic exposure.

Scenario 3: Bitcoin goes down 50% to $50

BTC²: With quadratic exposure, the new value will be 50² or 2,500 = (-75%) decrease. Initial value was $100, so the final value is $25.

2x Leverage: The 50% decrease is doubled to 100%. The position is liquidated and the entire initial investment is lost.

Advantage of BTC²: Significant advantage in this scenario. BTC² still retains value and doesn’t face liquidation, whereas the 2x leverage position would be liquidated, losing the entire investment.

Scenario 4: Bitcoin goes up 100% to $200

BTC²: With quadratic exposure, the new value will be 200² or 40,000 = 300% increase. Initial value was $100, so the final value is $400.

2x Leverage: The 100% increase is doubled to 200%. Initial value was $100, so the final value is $300.

Advantage of BTC²: Significantly higher gains compared to the 2x leverage due to the quadratic exposure.

Scenario 5: Bitcoin goes up 200% to $300

BTC²: With quadratic exposure, the new value will be 300² or 90,000 = 800% increase. Initial value was $100, so the final value is $900.

2x Leverage: The 200% increase is doubled to 400%. Initial value was $100, so the final value is $500.

Advantage of BTC²: Extremely higher gains compared to the 2x leverage due to the quadratic exposure.

Conclusion: The Power of Eliminating Liquidation

The BTC² Perpetual Index by SquaredLab brings a #revolutionary perspective to Bitcoin #trading. By squaring the #Bitcoin price, it not only allows for potentially higher gains but also protects traders from the dreaded liquidation. It empowers #traders to stay invested even through the harshest market conditions and benefit from eventual recoveries. This innovation marks a new era of trading, with minimised risks and enhanced possibilities.

Introduction

Bitcoin (BTC) and BTC² by Squaredlab are interconnected 🔗 assets. While BTC has established itself as the pioneering and most prominent cryptocurrency, BTC² offers a unique approach to Bitcoin Trading with its squared price tracking mechanism.

This article explores the relationship between BTC and BTC², shedding light on how BTC²’s squared tracking amplifies price movements and discussing the advantages and use cases of this innovative approach.

Relationship between BTC and BTC² 🤝

BTC and BTC² are closely interconnected, but their performance characteristics set them apart. The significant difference in performance can be attributed to BTC²’s unique ability to track the squared price of Bitcoin. One remarkable illustration of this connection is observed during specific time periods. For example, from 19th to 21st June, BTC experienced an increase of 12.85%, while BTC² outperformed with a substantial surge of 26.58% 📈.

The squared tracking mechanism of BTC² sets it apart from BTC and other investment options, particularly those involving leverage or margin trading. Unlike a 2x leverage position, which carries the risk of liquidation, BTC² eliminates this concern.

Understanding BTC²’s Squared Price Tracking:

BTC²’s squared price tracking mechanism lies at the core of its unique value proposition. BTC² amplifies and reflects the squared price changes of BTC. This means that even minor price fluctuations in BTC can have a more pronounced impact on BTC².

Advantages and Use Cases of BTC²:

Enhanced Exposure and Potential Returns: By tracking the squared price of BTC, BTC² offers investors an opportunity to amplify their exposure to Bitcoin’s price movements. The squared tracking mechanism magnifies price actions, enabling investors to potentially realise enhanced price movements.

Hedging Against Bitcoin Volatility: BTC’s price volatility is a characteristic that attracts many investors. However, this volatility can also pose risks. BTC² serves as a tool for hedging against this volatility, providing a more pronounced exposure to BTC’s price movements. Investors seeking to manage their risk exposure can utilize BTC² to offset potential losses or maximize gains.

Trading and Speculation: The amplified price movements in BTC² make it an appealing option for traders and speculators looking to capitalize on short-term price fluctuations. The squared tracking can magnify profit potential, attracting those with an appetite for active trading strategies.

Considerations and Risks:

It’s crucial to understand that the squared tracking mechanism of BTC² amplifies both gains and losses. While it offers the potential for higher returns, it also exposes investors to increased risk. During periods of downward price trends, the squared tracking can lead to larger losses compared to BTC making it highly beneficial for Short traders.

Conclusion:

The divergence in performance between BTC and BTC², as exemplified by the 12.86% increase in BTC compared to the 26.57% increase in BTC² during the 19th-21st June period, highlights the influence of BTC²’s squared price tracking. BTC²’s unique feature of amplifying and reflecting the squared percentage changes in Bitcoin’s price unlocks opportunities for enhanced exposure, potential returns, and risk management. As the cryptocurrency market continues to evolve, the relationship between BTC and BTC² offers an intriguing avenue for exploration and discovery.

SquaredLab BTC² aims to provide a unique opportunity for traders who want to avoid the complexities and risks associated with margin trading or liquidation but still benefit from the leveraged payout.

While on 6th June’23 Bitcoin was up around 2.8%, BTC² grew by 5.29% ( % may vary timezone to timezone ). This was possible on the concept behind BTC² that revolves around its ability to track the square value of Bitcoin. This approach introduces a novel way to gauge the market movements of the leading cryptocurrency.

By focusing on the square value, BTC² offers traders an alternative perspective on Bitcoin’s potential growth trajectory, thereby opening up new possibilities for investment strategies. 💡

BTC² has the potential to revolutionize the leveraged trading landscape. While, leverage trading allows traders to amplify their potential returns by borrowing funds to increase their trading positions. However, this approach also exposes traders to significant risks and potential losses, as they are essentially trading with borrowed money.

⚖️ By removing leverage and margin from the equation, the BTC² Perpetual Index aims to provide a more secure and transparent trading experience.

Moreover, the versatility of the BTC² Index allows traders to explore various strategies and tailor their approach according to their risk appetite and investment goals. 🔄 🎯

BTC² offers a unique approach to capturing the market movements of Bitcoin. By tracking the square value of Bitcoin, BTC² provides traders with a fresh perspective and a chance to benefit from leveraged payouts while avoiding the complexities and risks of margin trading and liquidation.

Cheers and Have a good day!