What is driving stock traders’ participation in the cryptocurrency market today?

Why is that cryptocurrency market up today? What factors are fueling renewed optimism and increased interest in crypto assets, particularly among traders traditional arenas? While the acceptance of crypto assets was slower among Indian Traderstheir Western counterparts, in particular traditional traders In the US, people adopted it much earlier. For them, exploring cryptocurrencies opens the door to new opportunities beyond traditional markets, with a wide range of products and services available.Cryptocurrency seduces Indians Stock traders

Indian equity traders are increasingly attracted to the cryptocurrency market for several compelling reasons. The high volatility of crypto assets, characterized by substantial price swings over short periods of time, offers significant growth potential. BackTraders skilled in predicting market movements capitalize on these fluctuations, finding lucrative short-term trading and arbitrage opportunities.

Additionally, cryptocurrencies offer diversification benefits. By incorporating crypto assets into their portfolios, equity traders can expand their investments beyond traditional stocks and bonds, potentially spreading overall portfolio risk. Unlike conventional financial assets, crypto assets often have a low correlation to traditional markets and macroeconomic factors, providing a hedge against stock declines.

The 24/7 availability of the cryptocurrency market is another major draw. Unlike stock markets with specific trading hours and holidays, the cryptocurrency market operates around the clock. This continuous access allows traders to react to market movements at any time, improving flexibility and expanding profit opportunities.

What Stock Traders Look For From Cryptocurrency Exchanges
As the crypto asset class is relatively newer and many exchanges in India have only started a few years ago, newbie crypto traders are not fully aware of the features, products, and services offered by exchanges. To address this issue, crypto exchanges have introduced specialized services for high-volume traders and HNIs, and provided them with early access to new products/services and customized financial solutions. Like stock trading apps, traders expect high liquidity and advanced trading tools, for example, various order types that are essential to implement sophisticated trading strategies. A user-friendly interface is essential, allowing traders to effortlessly navigate the platforms and execute trades efficiently. Access to comprehensive technical analysis reports is also highly valued, as it helps traders identify potential opportunities and make informed decisions. Unlike stock trading apps, investors and traders should know that cryptocurrency exchanges provide access to multiple markets and tokens accessible to global investors, ensuring that traders can execute trades quickly and at optimal prices.

Equity traders are increasingly looking to crypto derivatives for leveraged trading. API trading on spot and derivatives can further maximize trading opportunities by enabling automated and algorithmic trading strategies. Incentives and rewards, such as loyalty and referral programs, enhance the trading experience, while 24-hour customer support and tax assistance provide essential support.

In this dynamic landscape, it is essential to understand and comply with the ever-changing regulations. Traders prefer reliable and reputable exchanges, which minimize the risk of scams and ensure regulatory compliance. Investors should be aware that in India, it is mandatory for exchanges to be FIU IND compliant.

VIP programs: a strategic advantage

Recognizing the needs of high-volume traders, many Indian exchanges have introduced VIP programs similar to those offered by their global counterparts. These programs serve multiple strategic objectives: they encourage high-volume traders, improve user retention and loyalty, attract institutional and high-net-worth clients, generate additional revenue, and contribute to market stability and liquidity.

VIP programs offer exclusive benefits and personalized services, fostering a loyal and active trading community. By offering these benefits, exchanges gain valuable insights for continuous improvement and maintain a competitive edge in the market. Ultimately, these programs contribute to the long-term success and growth of exchanges and the broader VDA market.

(Author Mridul Gupta is COO, CoinDCX. Opinions are my own)

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(Originally published July 13, 2024)

(Disclaimer: The opinions expressed in this column are those of the author. The facts and opinions expressed herein do not reflect the views of www.economictimes.com.)

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