Litecoin Traders Are Increasing Their Exposure To HFDX For More Efficient Perp Execution During Volatile Cycles

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Litecoin Traders Are Increasing Their Exposure To HFDX For More Efficient Perp Execution During Volatile Cycles

The best time to be a crypto trader is during the bull market. Prices are on the rise, the market is riding a clear momentum, and profits are basically sky high. Conversely, the bear market is the worst time to be a trader in the crypto market. Unfortunately for many crypto traders, whether or not they would like to admit it, the crypto market is in an extended bear market.

Litecoin traders seem to have found a hack, though. Rather than allow capital to get eaten up by the extreme market volatility plaguing the industry, on-chain data suggests they are rotating it into perps platforms like HFDX to hedge against growing inflation. And it is easy to see why. According to live, real-time data, HFDX has recorded over $60 million in open interest as the demand for perps and perp liquidity grows amid the harsh crypto bear market.

Litecoin Traders Jump Ship As Token Falls By 35% In A Single Month

Litecoins price has fallen by 35% as of the time of writing, as the extended bear market continues raging on. Worse still, none of the relevant signals point towards a price correction shortly. This means Litecoin traders have essentially two solutions: show conviction and ride the downward momentum, or suck up possible losses and rotate capital elsewhere to prevent even further loss.

From all indications, many traders in this category are increasingly going with the latter rather than the former. Whether or not this speaks to their conviction is left to the audience to decide, but there is no denying that the logic is sound, especially when the latter option comes with the possibility of recouping previous losses through active and passive income generation.

Perps trading platforms, like HFDX, have come under huge demand thanks to impressive product offerings and the harsh reality of the market. For example, one factor possibly driving interest in HFDX is its yield accumulation. The platform notably enables users to earn up to 15% on their total trading equity across all their trading accounts.

HFDX Open Interest Sky Rockets As Market Conditions Worsen

In the last month alone, notable crypto tokens, such as Bitcoin, Solana, and Ethereum, have fallen by 25%, 39%, and 35%, respectively, as of the time of writing, amid a broader market downturn that began late last year. In this context, it is easy to see why crypto traders are scrambling to hedge their portfolios against inflation that may equal or even surpass anything we have seen recently.

Perp trading platforms have emerged as a popular solution to the volatility problem in the market. HFDX, in particular, has become a favourite among traders thanks to the many ways it allows users to generate profit in spite of the harsh market conditions.

One such way is the yield-accumulation feature mentioned earlier. Another is leveraged trading. To put it simply, HFDX allows users to trade perpetual futures with leverage, thanks to features such as the Liquidity Loan Note (LLN) strategy. The Liquidity Loan Note (LLN) strategy allows users to allocate capital to protocol liquidity in return for pre-defined, fixed-rate returns over a stated term.

HFDX goes a step further to limit the risk factor on the platform through a design that ensures all of these features are backed and funded by real on-chain activity, such as trading fees and borrowing costs.