Crypto market investment warning: arbitrage and altcoin risks
There are many savvy people in the market today. Once a high-profit and high-deviation arbitrage opportunity appears, large funds will rush in and make the price return to a fair level.
Beware of arbitrage traps
Newbies should not try to get rich by arbitrage. Many attractive arbitrage opportunities are actually hidden dangers and can easily trap themselves. For example, in the TRB incident, those who went long on BN and shorted OK in order to obtain a daily return of 1% with 5x leverage, because the premium suddenly rose to 40%, the risk of liquidation increased dramatically, and 1x leverage may also be damaged.
Altcoin bull market risk
In a bull market, especially when altcoins are hot, do not participate in locked positions or time-limited arbitrage, such as regression arbitrage and hedging schemes. Although not all are traps, when encountering the main rising wave, the price may be far beyond expectations, and arbitrage will fail. Recently, some people abandoned hedging when buying YT Phase III products and turned to cautious risk avoidance.
Summary
In a highly volatile market, it doesn’t matter if you make less money, the principal is the most important. Only by adhering to the principle of “profit second, safety first” can you thrive in the market.
