So with Bitcoin being mostly bearish since January, I've been trying to find a way to hedge my money without having to cash to USD/USDT. I've been watching DGD for the the past couple weeks and have noticed that it will mirror bitcoin almost exactly a lot of the time. Now this is based only on the amount of time I've been able to follow it. Also you have to take into the fact that a lot of these coins are being manipulated on the market by bots. But when the whales aren't messing with our money, the mirror effect comes into play. Here are a few screen shots I took to try to prove to myself that this was the case. This was on Binance last week using the Binance trading software for the PC.
1 minute ticker
After showing this to a few people on Discord and coming up with a theory on how to hedge it (i'll go into that later); people were asking me to take screen shots in different intervals to see the differences. .
5 Minutes
Another 5 minute screen shot the later in the day.
15m
30m
1 hour
6 hour
So as you can see, as the intervals get longer, the less they mirror, but they are still pretty close.
Onto my theory on how to hedge bitcoin. .
My idea was to take half of your bitcoin and put it into DGD. So when bitcoin would go up, you'd be losing satoshis's with DGD, but your fiat would stay the same give or take a couple cents with the price of bitcoin going up. But as bitcoin would go down, you'd be gaining satoshi through dgd so your fiat would even out. Now this is where it'd be your choice on how to gain profits on this hedge. You could try to ride the waves and end up cashing out at almost even; or sell high and buy low with DGD whenever you had the opportunity.
I tested this for a good 2 weeks and came to this conclusion. . .
DGD and BTC will never mirror each other 100%. But they will dance with each other more often than not and more than any other coins to my knowledge.
Letting it run without buying and selling anytimes in between actually netted me a very small profit as long as they stayed mirrored.
I was able to double my money by taking my money and distributing them 3 ways. 1/3 in bitcoin, 1/3 in DGD, and finding an uptrending coin to put 1/3 of my money in.
Take this all with a grain of salt and do your own test. But I just wanted to share this with you all as I know a lot of people have been having a hard time trying to figure out what to do with their money while Bitcoin is bearish. .
This is my first post on steemit so, be gentle. :) Hope this was informative. And if you all have any questions, don't hesitate to ask.
Keep trading, stay smart, spread the love and knowledge.
-CrypTopher