There is now a new way for traders and investors of Ethereum (ETH) to diversify their portfolio. dYdX – a decentralized financial derivative startup – wants to create leverage and short positions for ERC-20 and ETH tokens. Remarkably, the firm recently rounded up a funding session which was led by Andreessen Horowitz – the market leader in investments.
Abstract, Kindred, Polychain Capital, and angel investors like the CEO of Coinbase (a digital currency trading platform) – Brian Armstrong, and Elad Gil – a protuberant investor – were the other prominent investors for the funding round.
Antonio Juliano’s Remark
Antonio Juliano – the founder of dYdX, said that “the major use of digital currency so far has been HODLing, buying, selling, and speculation. That isn’t how sophisticated financial institutions trade.” He also talked about derivatives markets and how they are larger than the fundamental spot markets by a great magnitude.
Juliano also said that “the digital currency market is perhaps on the order of five to ten billion USD in volume, so the derivatives markets are expected to be ten times bigger. He believes there is a very big opportunity there.”
An Opportunity for Ethereum (ETH) Trader to Diversify Their Portfolio
dYdX offers a short ETH token whose value is inversely pegged to the price of Ethereum (ETH). When the value of Ethereum (ETH) increases, the value of the token will decrease. When the value of Ethereum decreases, the value of the token will increase.
The firm also wants to offer leveraged and short tokens for other ERC-20 tokens. This would enable users to short digital currencies that they believe are going to reduce in value.
Ethereum (ETH) Price Today – ETH / USD
At the time of going to press, Ethereum (ETH) is trading at $409 after losing just 0.1 percent of its value over the past twenty-four hours. The market cap of Ethereum is $41.1 billion and its trading volume over the past twenty-four hours is $1.37 billion.