Market Analysis – The first major correction after the start of the bull market, which currencies should be bought at the bottom? What is Binance’s new BFUSD?
Yesterday was the first major correction since the bull market started a month ago. BTC dropped from a high of $99,000 to a low of about $90,791, with a maximum drop of about 8.7%. Altcoins generally fell by more than 10%. The contract market has so far The liquidation of long positions reached US$770 million, which proves the saying that in a bull market, it is easy to lose money. When the market is too FOMO, you have to be careful. Therefore, GT Radar's follow-up positions began to reduce positions one after another last weekend, avoiding some pullbacks. In the past week, the funding rate of altcoins has hit new highs, and many arbitrage opportunities have emerged. Binance will also introduce the newly launched BFUSD function later, which can further improve capital efficiency for everyone.
After each round of correction, the sector will rotate. It can be said that during this round of correction, some originally high-quality currencies were lowered, such as BTC, DOGE and SOL. The decline of SOL yesterday was relatively large, and the main reason was still related to Pump Fun transferred 99,999 SOL to the Kraken exchange, which caused considerable pressure. In addition, last week, Cboe once again submitted a 19b-4 application to the SEC, rekindling the bullish sentiment of the SOL ETF and driving the price to a high. However, Bloomberg analysts later said that the approval of the SOL ETF may be delayed until the end of 2025, causing the bullish sentiment to cool down. , causing some turbulence in the short term.
However, SOL still has a lot of room for imagination in the future. In addition to the continued popularity of memes on the SOL chain and the possibility of future ETFs, SOL has a good upward narrative.
After yesterday's decline, there has been a small rebound so far. BTC has also stood at the support level and started to rebound. In addition to the low-end currencies mentioned above, DEFI and some ETH series currencies have also rebounded significantly. AAVE, PENDLE, and ENS are all rising strongly. The copy investment group will also place small positions in these currencies. The overall position will still be set to a more conservative state. The main reason is that the current general direction may still need to be consolidated, and it is not ruled out that there will be a downturn. After a sharp drop, ETH also fell after fluctuating at a high level for a long time. Although it rebounded quickly today, the trend has not yet left the consolidation range, and the accumulated open positions of a large number of contracts have not decreased. At this time, the risk of over-optimism will be greater, so It is expected that only a small amount of positions will be opened and we will wait for the market's next reaction.
What is BFUSD?
Binance has officially launched BFUSD, a margin asset designed to provide rewards for futures trading at 10 a.m. this morning. This new service can provide traders with additional profit channels for their margins and greatly improve the efficiency of capital utilization. Today we will take a moment to introduce to you what BFUSD is, the relevant regulations of the product, and potential risks.
BFUSD is a Binance futures margin asset that can automatically increase interest rates. Users only need to deposit BFUSD in a contract account to automatically receive passive income. According to official information from Binance, the annualized return at the time of writing this article can be up to 23.9%.
Its source of income is similar to the stablecoin (USDe) issued by Ethena introduced before. It is through mortgaging Ethereum and delta hedging it to stabilize the value of its stablecoin USDe and earn additional income at the same time. To put it simply, Ethena will reduce or eliminate the impact of ETH price changes by shorting collateral, and at the same time earn ETH pledge (currently annualized at about 3%), short-selling funding rate (currently on Binance The annualized ETH funding rate is 26%) additional income, thereby providing sustainable passive income for the USDe stablecoin.
The risks of holding BFUSD mainly include the following points:
The funding rate turns negative: When the market trend turns bearish, the funding rate may reverse, which means that short sellers must pay long sellers. At this time, the funding rate will have a negative impact on the BFUSD hedging portfolio. cost. In this case, the income of BFUSD holders may be reduced to 0.
However, Binance emphasized that even if the funding rate is negative, BFUSD holders will not have to bear any fees, and Binance may use the BFUSD reserve fund (initially $1 million) to pay these fees.
Binance Credit Risk: Holding BFUSD assumes Binance’s credit risk. If Binance goes bankrupt or fails, it may not be possible to exchange BFUSD back to USDT.
Run risk: Although BFUSD is 1:1 with USDT, Binance reserves the right to suspend or delay redemptions for up to seven consecutive days. If there are a large number of requests for BFUSD exchange on the platform on the same day, it may cause Binance to take measures to liquidate and adjust the BFUSD mortgage pool and hedging portfolio to fund exchange requests, thereby suspending (up to 7 consecutive days) or affecting immediate exchange.
BFUSD related rules
Operationally, users can start earning passive income by simply purchasing BFUSD using USDT in their Binance Futures account. However, the USDT deposit of an already opened position cannot be used to purchase BFUSD, so the user must close the position first and then re-open the position after purchasing BFUSD, or choose to exchange the remaining margin for BFUSD first, and then exchange the remaining USDT after closing the position. into BFUSD.
Additionally, the maximum amount of BFUSD a user can purchase will vary based on VIP level.
As a margin, BFUSD also has some details that need to be paid attention to.
The guarantee ratio of BFUSD is floating, please refer to this page for details.
BFUSD is not supported in joint margin mode.
Coin-based contracts, grid trading, and copy trading also do not support BFUSD.
Early bird event
In order to promote the adoption of BFUSD, Binance has launched many early promotions. The activity period is from November 27, 2024 to December 27, 2024, which lasts for one month. During this period, USDT purchases BFUSD without any handling fee (but the exchange You still have to pay a 0.01% handling fee when returning USDT).
In addition, qualified users who register to participate in the event subscribe for BFUSD for more than 72 hours and conduct at least one U-based contract transaction can enjoy a higher annualized income (Boost APY), currently 23.9%; if the conditions are not met, only You can get the basic income (Base APY), which is currently 18.14%.
Finally, the first 9,000 qualified users who register to participate in the event and reach 5,000 BFUSD and 10,000 BFUSD holdings will receive an additional 5 USDT or 10 USDT respectively. The total prize pool of 60,000 USDT will be awarded on a first-come, first-served basis until the 60,000 USDT rewards are distributed.
Clickable link to register if you haven’t signed up for Binance yet
Binance Copying Analysis
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The yields of "GTRadar - BULL", "GTRadar - Balanced" and "GTRadar - Potential Public Chain OKX" in the past 7 days are +6.7%, +3.95% and +5.14% respectively, and the yields in the past 30 days are + 127.58%, +40.20% and +41.62%.
Currently, "GTRadar - BULL" holds a net long position of 10%, mainly in BTC and ETH.
Currently, "GTRadar - Balanced" holds about 10% of its net long positions, mainly SOL and ETH.
Currently, "GTRadar - Potential Public Chain" holds about 30% of its net long positions, mainly SOL and ETH.
The long-term returns of a follower who often changes his investment portfolio are not as good as those of a follower who continues to follow a single group. Don’t end the follower easily just because of a short-term retracement. Judging from the curve, the retracement is a good time to start following. In and out, on the contrary, the yield rate will be significantly reduced.
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The above content does not constitute any financial investment advice. All data comes from GT Radar official website announcements. Each user may have slight differences due to different entry and exit prices, and past performance does not represent future performance!
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