Connect with us

Latest News

Everything You Need to Know When Using a Digital Currency Exchange | IDOs News

Avatar

Published

on


The crypto market is currently in another bull cycle. Bitcoin recently hit an all-time high price of $73,800. There are also hundreds of meme coins booming and busting in quick succession.

The crypto market is currently in another bull cycle. Bitcoin recently hit an all-time high price of $73,800. There are also hundreds of meme coins booming and busting in quick succession. Of course, you very likely already know this. And this is a testament to how much cryptocurrencies have permeated society and changed how we perceive and manage financial assets.

Much of this has been made possible by digital currency exchanges that provide platforms for billions of people worldwide to trade and invest in cryptocurrencies—at transaction speeds that even the traditional financial system is still only catching up to. Here’s an example of such an exchange: https://www.independentreserve.com/au.

 

However, as it is with any financial venture, these exchanges come with a unique set of risks and challenges. For anyone looking to navigate the crypto market, and hopefully participate in the bull season, it is crucial to understand these intricacies.

Why are Digital Currency Exchanges Necessary?

Crypto exchanges act as intermediaries and facilitate the trade of digital assets like Bitcoin and other cryptocurrencies. They provide a structured marketplace that is usually intuitive enough to be navigated by both seasoned traders and newcomers alike.

 

Additionally, these also typically offer analytical tools, and real-time market data and sometimes even help provide educational resources to assist users in making informed decisions in trading their cryptocurrencies.

What Are These Risks And Challenges?

However, the purpose of this article is to get into the risks and challenges that are associated with these exchanges. So, let us get into them:

Volatility risk is not exactly directly tied to crypto exchanges. However, it bears mentioning, as these exchanges are the main arenas where crypto transactions take place. These fluctuations typically occur in mere seconds, leading to either high gains or heavy losses. This volatility is usually caused by a variety of factors including announcements from regulatory bodies or government leaders or random shifts in market sentiments.

 

As an investor, you need to learn how to navigate these turbulent waters with the care of an expert captain; developing a system that allows you to make quick movements in your portfolio, in adapting to market changes. Essentially, the markets are unpredictable, so you have to keep your ear to the ground. To do this, you need to switch on news alerts for the keywords that are often included in the news headlines that typically move the markets. 

 

Many crypto exchanges come with features like this that alert you to market-moving events; so it may be wise to consider that as a factor in selecting which exchange to use. However, you also need to develop your independent systems for monitoring these trends.

Another area with a lot of risks is the legal and regulatory aspects of things. The crypto market is relatively new, and hence the legal frameworks are largely nascent and evolving or even non-existent. From countries like el-Salvador where crypto adoption is encouraged by the government to countries like China, where it is permanently banned; regulatory attitudes vary widely. And sometimes, even within the same country, attitudes can shift, depending on internal political cycles.

 

This inconsistency can make compliance a complex affair. For example, in Nigeria, Binance suddenly got banned by the government, even after several government figures had indicated an interest in encouraging the growth of crypto in the country. This inconsistency also introduces a layer of uncertainty that can influence market behavior and price movement.

 

So, as an investor, it is quite important that you also keep an eye out for regulatory changes in the jurisdiction that you operate in. But, it is even more imperative that you find measures to insulate yourself and your assets from the reach of the regulatory agencies in your country.

As it is with anything else in this digital era, the threat of security breaches looms large over crypto exchanges. While most exchanges typically have an array of innovative protective measures, hackers and their tactics are also always evolving and getting more sophisticated.

 

Unfortunately, the consequences of one successful breach are usually enough to cause significant damage to both exchanges and individual investors; and make insignificant the efforts of the security systems in place in stopping a thousand earlier threats.

 

Anyway, it is important for you as an investor to research the security measures employed by the various exchanges before choosing one. We have said that security threats are ever-evolving, but it is still always best to be on the side that is always on top of its game when it comes to security. You want to look out for encryption protocols, cold storage solutions, and rigorous security audits.

 

However, the role of personal vigilance cannot be overemphasized. While it is great to trade with an exchange with cutting-edge security measures, you can also personally deploy strategies like using complex, unique passwords and employing two-factor authentication.

This is particularly important if you’re one of those who like to take advantage of meme coins that can see growths in thousands of percentages. Whether your coin gains 180% or 18,000%, it only matters if there are enough other traders in the market who are willing to buy it from you in exchange for other crypto coins or fiat. That is what liquidity is — your avenue to exit and take profit from a trade.

 

Exchanges that have low liquidity may expose you to the risk of slippage, which is when the final executed price of a trade diverges significantly from the expected price at the time the order was placed. These discrepancies can erode trading margins, and impact your profitability. So, you need to opt for exchanges that are known for substantial trading volumes to mitigate against possible liquidity problems.

Why you need Diversification to Mitigate Risks

There are many strategies that you can employ to mitigate risks, but like anyone will tell you, your top option is to diversify your holdings. Diversification can take varying forms. It can mean holding a varied range of cryptocurrencies across the industry—rather than focusing on only one token, as a way to shield yourself from the extreme volatility of the markets. It can also mean holding your assets in a variety of wallets and other storage options, to protect them from cyber-attacks.

 

Either way, diversification enables the spreading of potential risks, ensuring that the impact of one negative event does not necessarily wipe out your portfolio.

Conclusion

The global crypto markets are very volatile and can be fraught with a lot of security threats and other dangerous problems. However, it has also emerged as the greatest financial invention of the current century; as it has made more millionaires than any system before it.

 

However, it is always important for you as an investor to keep an eye on the market, and to arm yourself with the knowledge of various strategies to protect yourself from the pitfalls that abound in the ecosystem.

 

Do your own research, thoroughly, remain adaptable, and practice enhanced cybersecurity measures.

Image source: Shutterstock


Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Binance Futures Introduces Updates to Taker Program, Offering Fee Discounts | IDOs News

Avatar

Published

on







Binance Futures, the futures trading platform of cryptocurrency exchange Binance, has recently unveiled updates to its Taker Program. These updates aim to offer enhanced benefits to eligible users who engage in trading activities on the platform.

Effective from April 30, 2024, at 00:00 (UTC), eligible users will be able to enjoy a taker fee discount of up to 20% on eligible USDT-margined perpetual and delivery contracts. Additionally, users can take advantage of a promotional taker fee rate of 0.0136% when trading eligible USDC-margined perpetual contracts. This promotional fee rate will be available until July 1, 2024, at 23:59 (UTC).

To participate in the Taker Program, users must reach a total futures trading volume of 100,000,000 USDT equivalent within the last 30 days. Once eligible, users can submit an application for the program at any time. The assessment for eligibility will be conducted during the weekly review of the Taker Program.

Users who have previously applied for the Taker Program are not required to resubmit the application form. Their eligibility will be assessed automatically. The taker fee discount and promotional fee rate will become effective on the following Tuesday at 00:00 (UTC) after the weekly review.

Based on their weekly trading volume and volume share on BTC and ETH pairs, users can qualify for higher taker fee discounts on eligible USDT-margined perpetual and delivery contracts. The table below provides an overview of the fee tiers and their corresponding discounts.

It is important to note that from March 26, 2024, at 00:00 (UTC) to July 1, 2024, at 23:59 (UTC), users who qualify for the Taker Program and achieve a minimum 0.5% weekly taker volume share on USDC-margined perpetual contracts will receive a fee tier upgrade one level higher than their actual qualification. Alternatively, users can qualify for a higher fee tier and corresponding taker fee discount on eligible USDT-margined perpetual and delivery contracts based on their weekly trading volume and volume share on BTC and ETH pairs.

To illustrate, let’s consider User A, who achieves a weekly taker volume of 3,500M USDT equivalent, a 2% weekly taker volume share on BTC and ETH pairs, and a 0.4% weekly taker volume share excluding BTC and ETH pairs on USD‚ìà-M perpetual and delivery contracts from April 22, 2024, at 00:00 (UTC) to April 28, 2024, at 23:59 (UTC). Based on their weekly USD‚ìà-M futures taker volume share on BTC and ETH pairs, User A qualifies for Fee Tier 3.

Consequently, User A will enjoy a 20% taker fee discount on trades made on USDT-margined perpetual and delivery contracts starting from April 30, 2024, at 00:00 (UTC)to July 29, 2024, at 23:59 (UTC). Furthermore, User A will also benefit from the promotional taker fee rate of 0.0136% when trading eligible USDC-margined perpetual contracts during the same period.

Binance Futures continues to enhance its trading experience by providing users with fee discounts and promotional offers through the Taker Program. These updates aim to incentivize traders and provide them with a competitive advantage in the cryptocurrency futures market.

Image source: Shutterstock

. . .

Tags



Continue Reading

Latest News

USA and Nigeria to Discuss Digital Economy and AI Advancements for Economic Growth | IDOs News

Avatar

Published

on







The United States of America (USA) and Nigeria are poised to explore potential partnership opportunities in the digital economy, emerging technology, and the advancement of artificial intelligence (AI). The discussions aim to strengthen economic ties between the two countries and foster deeper collaborations in these areas.

The Deputy Chief of Mission at the U.S. Embassy, Mr. Arthur Brown, announced that high-level U.S. government officials will be in Abuja for a conference under the auspices of the U.S.-Nigeria Bi-National Commission. The conference will provide a platform for both countries to discuss the digital economy, emerging technology, and AI advancements.

During the closing ceremony of a four-day Workshop on National Artificial Intelligence Strategy in Abuja, Mr. Brown highlighted the importance of fostering partnerships and working together to drive robust, resilient, and inclusive economic growth. The United States is ready to work with Nigeria as equal partners in various areas, including talent development, infrastructure, research, and innovation. Mr. Brown also commended Nigeria for its support on the adoption of a landmark United Nations resolution on AI and pledged the U.S. government’s continued partnership with Nigeria on the economy.

Nigeria has shown a growing commitment to AI and emerging technologies in recent years. In November 2020, the country established the National Centre for Artificial Intelligence and Robotics (NCAIR), the first of its kind in Africa, marking a major moment for state-level commitment to AI. The NCAIR was established in line with Nigeria’s National Digital Economy Policy and Strategy 2020 – 2030, which listed AI as one of the eight pillars of the country’s digital economy.

Since the establishment of the NCAIR, AI has featured more prominently in government policy efforts. The NCAIR launched programs to equip children with coding and machine learning skills, making them conversant with AI and other emerging technologies. The Nigerian government has also directed the Nigerian Communications Commission (NCC) to provide AI research grants to tertiary institutions to drive innovation and improve economic resilience.

In March 2023, Nigeria drafted a National AI policy, co-created by the National Information Technology Development Agency and industry experts, to further strengthen its AI commitment. The country has also launched initiatives like the 3 million Technical Talents (3MTT) program and the Nigeria Artificial Intelligence Research Scheme (NAIRS) to train young people in AI and support AI startups and researchers.

The upcoming discussions between the USA and Nigeria present an opportunity for both countries to share knowledge, expertise, and best practices in the digital economy, emerging technology, and AI advancements. By aligning AI governance and ensuring safe, secure, transparent, and trustworthy AI deployment, the partnership aims to drive economic growth and innovation in both nations.

Image source: Shutterstock

. . .

Tags



Continue Reading

Latest News

IRS Introduces New Form 1099-DA for Reporting Income from Digital Asset Transactions | IDOs News

Avatar

Published

on







A preview of the new Form 1099-DA, a tax form that will be used by cryptocurrency brokers to record transactions involving digital assets, has been made available by the Internal Revenue Service (IRS) of the United States of America. As part of the continuous efforts of the Internal Revenue Service (IRS) to enhance compliance and guarantee that taxpayers appropriately report their income from digital assets, this form has been developed.

By the beginning of the year 2025, it is anticipated that Form 1099-DA will be in use. Brokers will be responsible for preparing this form for each client who sells or trades digital assets. According to the form, brokers will be required to disclose certain information, which may include token codes, wallet addresses, and places where blockchain transactions are taking place. It will be possible for the Internal Revenue Service to identify taxpayers who have transactions that may be difficult to detect via standard ways of information reporting if this level of reporting is implemented.

It is clear that the Internal Revenue Service is committed to resolving the tax consequences of transactions involving digital assets, as seen by the issuance of Form 1099-DA. According to the Internal Revenue Service (IRS), the purpose of mandating that brokers record these transactions is to guarantee that taxpayers correctly report their income and pay the required taxes on their activities involving digital assets.

The rising significance of cryptocurrencies, nonfungible tokens (NFTs), and stablecoins in the financial landscape is reflected in the decision made by the Internal Revenue Service (IRS) to list these digital assets as reportable assets on Form 1099-DA. Having a comprehensive grasp of the digital asset transactions that taxpayers engage in is very necessary for the authorities in charge of taxation, given the continued growth in popularity and utilisation of cryptocurrencies.

Among the crucial data elements that are captured by the draft form are the date of acquisition, the date of sale, the proceeds, and the cost basis of the crypto assets that were sold. For taxpayers to correctly submit their cryptocurrency tax filings, it is vital for them to have these information. Furthermore, the form has a checkbox labelled “unhosted wallet provider,” which serves as an indication that the Internal Revenue Service intends to include unhosted wallets within the definition of a broker. When generating unhosted wallets or engaging with platforms using unhosted wallets, users may be required to give know-your-customer (KYC) information as a result of this shift.

Despite the fact that the draft form offers helpful insights into the reporting requirements, it is essential to keep in mind that it may be subject to modifications as a result of the input that would be received during the comment period. Through its website, the Internal Revenue Service (IRS) welcomes members of the public to provide feedback on draft or final versions of forms, instructions, or publications.

As a conclusion, the issuance of Form 1099-DA by the Internal Revenue Service represents an important milestone in the process of regulating and reporting revenue from transactions involving digital assets. Through the requirement that brokers record these transactions, the Internal Revenue Service (IRS) hopes to promote compliance and guarantee that taxpayers appropriately report the income they get from digital assets. In order to prevent possible fines or audits, it is essential for taxpayers to be knowledgeable about their reporting responsibilities for digital assets, since the landscape of digital assets continues to undergo continuous change.

Image source: Shutterstock

. . .

Tags



Continue Reading

Trending