Latin America’s cryptocurrency platform, SatoshiTango, is launching the new margin trading tool in Bitcoin and other cryptocurrencies for its users.
The Margin trading, also known as a lever
For SatoshiTango users, both in the web version and in the app, they can use this new tool to get money from cryptocurrencies due to the current financial instability in Latin America.
This tool is nothing more than A loan to buy bitcoins with the added bonus of not having to pay installments as this is a very common mechanism in the traditional financial market: the Margin trading o Leverage is a tool that allows you to buy an asset (in this case one of the cryptocurrencies available on the platform) with part of your own capital and part of the capital provided by a third party, in this case SatoshiTango.
What are the advantages of this loan?
– Allows the profitability of an asset to be multiplied
– –The user does not use all the money, but the company adjusts (2,3,4 or 5 times) the investment so that the user can increase their purchasing power
-If the user’s estimate was correct, only a small commission will be paid for the days the platform has lent capital. It is possible to make a substantial profit with very little risk
-If the estimate was incorrect: the user chooses how long to wait and how much of the initial investment he exposes to the possible loss
-Backup: There is no chance that the user will go into debt and lose more than he bets
How does it work
An example explains how to use this tool: Assume that 1 bitcoin costs $ 100.
Daniela wants to invest in bitcoins because she believes the price of bitcoin will go up in the coming days. He would like to buy 1 Bitcoin, but he lacks the money because he has only USD 50 left. You can now do SatoshiTango with the Margin Trading Tool.
● Log in to your SatoshiTango account, go to “Buy / Sell” and click on “Margin Trading”.
● As I said, she believes the price will go up, so “bet on the go up”
● Then choose which cryptocurrency you want to buy. In this example, Daniela will buy bitcoins
● He enters how many dollars she will invest and then decides how often SatoshiTango should match her investment to buy bitcoins. According to our example, if she puts USD 20 on the previous screen and wants to buy a Bitcoin, she will ask us to “leverage” her investment for 5: as soon as she and four more than the platform.
● Once the process is complete, the position is already set and you just have to wait for the price of Bitcoin to move.
What happens if the price goes up?
If the BTC costs USD 120 instead of USD 100, Daniela is moving in the right direction and if she wants to collect her profit, she can liquidate her position:
● Pay the $ 80 that SatoshiTango lent him to leverage
● Restores the $ 20 you wagered
● He has credited the $ 20 he earned from the raise to his account
This means that Daniela has earned 100% of her investment with the margin trading tool alone
What happens if the price drops?
There is something very important: The user is not in debt with margin trading.
● According to Daniela’s example, SatoshiTango has a margin in which she will liquidate the position before she can take on real debt.
● Or Daniela, who sees the value of the BTC fall, decides to liquidate the position before she loses her entire investment.
● In both cases, the position is simply sold, SatoshiTango gets his money back from the leverage and pays off the debt, so Daniela is debt free.
● And what happened to Daniela’s $ 20? You may have lost all or part of it.
It is possible. Daniela might have thought Bitcoin’s value would go down, so she could have used leverage or margin
¿And how do you know how cryptocurrencies will move?
The truth is that it is not possible to predict the movement that will take place in the next few minutes, days or months. However, SatoshiTago did an analysis on this topic last year This note evaluates BTC’s performance against the dollar over the past 5 years. It also looks like 2020 will be a very good year for Bitcoin.
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