Crypto carry trade: Investors are switching from Bitcoin to a currency that can rise up to 200% in dollar terms

[gwolf666]

Carry trading is a financial strategy in which investors borrow in low-interest currencies or assets to invest in higher-yielding ones, seeking to profit from the interest rate differential. In the crypto market, this practice has become popular using stablecoins such as USDT and USDC, which offer low-cost loans to invest in high-yield DeFi protocols. Although carry trading improves liquidity and can generate significant profits, it also carries high risks due to the high volatility of the cryptocurrency market. The collapse of the Terra/Luna ecosystem in 2022 exemplifies how a sudden change in asset values can trigger massive liquidations and significant losses for those who use this strategy. Therefore, investors must handle these trades cautiously, adapting to changing conditions to avoid negative consequences.

 

[Suba]

Although crypto carry trading seems very attractive, and this strategy focuses solely on profiting from interest rate differentials, rather than price changes, there are often concerns about sudden interest rate changes that could lead to losses for traders. The carry trading strategy was originally implemented in forex trading.