Cryptocurrency Trading: Holdings Novice’s Hands Until They Improve

The cryptocurrency market has been maturing but there are still some obstacles stopping retail investors from jumping into the bandwagon and becoming a part of the financial revolution.

Among them we can find a lack of experience and confidence, a lack easily accessible and unified trading interfaces, a lack of trust, and the centralization of cryptocurrency exchanges. While there are plenty of professional investors on the market at this point, there’s a clear lack of retail investors who would add liquidity to the space.

Retail investors, on the other hand, likely would love the chance to make some money, but there’s a lack of knowledge regarding how to do it. Research, in fact, shows the public is eager to step into the cryptocurrency world, but most aren’t willing to put in the time to learn its ins and outs.

Cryptocurrency exchanges, which currently have a great influence on the market, can’t be expected to address the problem as they’re focusing on safeguarding users’ funds, even though they would love to see their user numbers surge.

While most crypto exchanges have the proper tools to help traders succeed, variations in user interfaces and available services make it hard for newcomers to learn how to use the tools properly. Helping traders use these tools is beneficial for both sides, as both make more money.

How New Traders Can Profit in The Crypto Space

Platforms focused on trader education and community experience-sharing are now closing the gap. Social Trading is the emerging trend resulting from this, seeing users share their trading ideas and strategies on a money-minded social media platform that isn’t cluttered with pictures of lunches and cats.

While these social trading platforms are a great solution, they still don’t address the lack of trust between traders and cryptocurrency exchange, nor the centralization of the latter. In fact, how can a newcomer decide which traders are worth following, and which traders are just going to help them lose money?

This leaves retail traders with two problems: they have to trust their private keys – and as such their money – to a company, and they have to often gamble on who’ll help them make money via the social trading system.

This system is akin to the traditional banking sector that so many people in the cryptocurrency space are trying to overthrow.

Some may point out correctly there are decentralized cryptocurrency exchange out there, that help out traders avoid handing their money over to a centralized entity. These are, however, often not-so-user-friendly and lack liquidity.

Combining Decentralization With Social Trading

The solution is a decentralized cryptocurrency exchange that lets traders control their own private keys while also offering them a social trading model: FUMGO. The FUMGO platform offers inexperienced users a way to keep controlling their funds while also offering them ways to make money.

Using FUMGO’s social trading terminal, newcomers can follow experience traders – whose stats are out in the open – and automatically copy their trades to also make some money. Experience traders can, thanks to the system, establish themselves as thought leaders in the cryptocurrency space.

FUMGO is a project born thanks to the Binance DEX community, and integrates several reputable cryptocurrency exchanges and communicates with them in real time to ensure users have as much information as possible on its terminal.

The organization’s co-founder and CVO, Anton Bartenev, noted we rely on social media for everything nowadays, and figured it could also help out with stopping people from fearing cryptocurrency trading. He added:

While considering the problem, we realized that we would need to create a system that allowed users to exchange their ideas and strategies, in one form or another, without relying on trust.  This is why we put the Binance DEX – both the community and the exchange itself – smack in the center of our system: it ensures the transparency and eliminates the need for trust.

The FUMGO terminal records all traders and allows traders to be ranked based on their numbers and their performance, while keeping data completely out in the open for prospective followers to analyze their chances of success.

FUMGO’s CEO and co-founder, Yeho Shyshov, stated:

You start with mirroring the trading strategies of experienced professional traders and learn to make money in the crypto space without spending vast amounts of time and mental power, and the pros get to prove their salt and up their game.

Sub-accounts in Crypto: What They Are and How They Work

 

Julia Gerstein, a crypto trading bots enthusiast and a content writer at TradeSanta. My final goal is to help readers find what they need, understand what they find, and use what they understand appropriately.


Speaking generally, a sub-account is a segregated smaller account that is tied to a larger primary account. Sub-accounts may serve different functions depending on the objectives of their owners. The term can refer to multiple email addresses linked to one user or secondary accounts tied to a primary account with a financial institution or a bank.

For this article, we will be looking at sub-accounts as they exist in the crypto industry, and specifically on trading platforms.

Built-in Sub-Accounts

On trading platforms, the sub-accounts feature allows users to create a set of subsidiary accounts with different trading strategies, funds and end customers. On some platforms, general accounts already come with built-in sub-accounts.

For example, exchange platform Crypto Facilities provides each user with cash and margin accounts when they sign up. While deposits and withdrawals are completed with the cash account, trading an instrument requires users to make an internal transfer from a cash account to their margin account that corresponds to the instrument in question.

Each instrument has its own margin account. This grants users more control over their funds and allows them to manage risks for each instrument separately from their main balance.

Optional Sub-Accounts

Other cryptocurrency exchanges, such as Gemini and Binance, have launched sub-accounts as an optional feature for institutional investors.

As an optional feature, sub-accounts can serve to introduce additional security measures and different access levels between the main account and its subsidiaries. Binance has underlined the differences between a master account and its subsidiaries, providing the former with the exclusive ability to view all data and balances, transfer funds between accounts, and have full managerial control and access to a range of asset audit tools.

Here master accounts have sole control over the movement of assets between sub-accounts, and can grant each of them different access levels and permissions. This ensures that the main account has the power to direct and monitor the actions of all its associated accounts, while each sub-account can perform its function independently from other sub-accounts.

Not Only for Institutional Investors

While institutional investors have been able to create sub-accounts for a while, this feature is still being introduced by more and more major exchanges.

Now even individual investors can create subsidiary accounts to try and assess the performance of distinct trading strategies. For example, HitBTC recently introduced its own sub-accounts feature that is now available per user’s request.

At HitBTC, sub-accounts enable users to create separate subsidiary accounts with which they can utilize various trading styles and strategies with operational autonomy. While each sub-account is separate, all of them are still tied to a master account and contribute to the cumulative volume of all accounts connected to the master.

Because trading volume is measured cumulatively, the use of the subaccounts feature can open up additional benefits for traders such as lower commissions due to progressive fee tiers that reward users for contributing to the liquidity on the trading platform.

Therefore, users can perform a variety of different trading activities unconnected to each other, and all the activities will still weigh in the financial favor of the parties involved. Master accounts also have access to important data such as the performance of each sub-account and total trading fees of all linked accounts combined. While the feature is designed with institutional and corporate clients in mind, on HitBTC any user can create sub-accounts upon request.

The adoption of this feature by more and more trading platforms will be beneficial for both institutional and individual traders. Some users can utilize it to execute different trading strategies or try various algorithms with a clear picture of their effectiveness, others to manage their team and analyze the performance of each account securely and conveniently.

Featured image by Tyler Franta on Unsplash