Trader Note

Pre-market fear: expect a fishing line move lower and exit. Re-enter in good position or just stay out.

USDEUR in XBT - Spread Premium

FX traders take note: Crypto markets are spread from currency markets. Trade accordingly.

    

2017-12-18 FX Bitcoin Spread.jpg

    

Over the weekend, when FX markets are stalled, crypto markets are vibrant. This means they have volatility across various currencies. From the chart above, the spread between USD/XBT and EUR/XBT is at 0.80. On the FX excanges, the UDS/EUR is trading at 0.85. That spread difference is HUGE.

If you are spreading USD/EUR using XBT, you will pay around 0.2% fees, but that covers the spread with profits. The spread against FX markets (0.80 vs 0.85) amounts to about $1000/bitcoin, which is well worth the $40 crypto currency trade fee.

This level of spread (higher USD price in XBT) may only exist for recent demand in Bitcoin Futures, so trade it soon.

If you are a holder of bitcoin and looking to cash out, selling in USD will provide you with a premium over Euro. Even if the funds wire costs $40, and the banks rape you at a 0.82 rate, you still make a better premium on the transaction than a straight euro trade. So, be aware of that when making your trades.

 

 

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