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Amsterdam, North Holland, 27 January 2023, Chainwire — Index solution provider DemaTrading.ai has conducted an extensive survey of major cryptocurrency exchanges. The results, drawn from conversations with over 30 exchanges and over 50 investors, reveal some of the most common reasons why exchange customers are inactive.
The study identified the following main reasons behind customer inactivity:
Too many options: The average exchange has hundreds of assets listed. The average customer doesn’t want to explore all these assets and often ends up choosing none. Over 60% of his digital assets on exchanges are not traded at all.
When customers make the wrong choice, they end up with bad experiences such as: Most customers choose only a handful of cryptocurrencies to trade as they don’t want to spend weeks researching their assets. This gives them a high risk profile as they are only exposed to a small number of assets. Customers who buy slowly dying tokens are devastating. They will probably never invest in cryptocurrencies again.
Too much time spent managing portfolio: Risk-averse customers know how to spread well, examining all assets, keeping the market up to date, and frequently readjusting growth differences to maintain the same risk profile. However, performing frequent portfolio rebalancing manually takes a significant amount of time. Investors often do not want to actively manage their portfolios.
Absence of index fund options: Index funds contain listings of assets within specific categories such as Proof of Stake, Metaverse, Layer 2, NFTs and DeFi. This makes it very easy for users to invest in potential sectors. You don’t have to research every asset in your industry. You will feel less overwhelmed and your risk profile will improve. Indexes are automatically rebalanced and require active management. They simply buy or buy a DCA so they can sit back and relax.
DemaTrading.ai has developed a trading engine that optimizes the trading of baskets or portfolios (based on indices) by using machine learning to train models. Not only does this help execute orders at better prices, it also increases liquidity on the exchange as orders are spread out. A sophisticated (market) maker module is embedded, allowing exchange users to buy and sell assets faster. This makes the product more beneficial to the exchange and its users.
Compared to the average buy-and-hold strategy, investing in indices increases the average annual trading volume and is usually safer as investors place their chips in many positions at the same time. This is why major exchanges such as Binance and Bitpanda have deployed similar solutions.
Through DemaTrading.ai’s Portfolios-as-a-Service, digital currency providers and asset managers can access indices for institutional investors. DemaTrading.ai provides a complete hands-off plug-and-play infrastructure solution for exchanges, brokers, payment solutions/apps and (digital) asset managers. DemaTrading.ai is currently raising its next round of funding after a successful pre-seed from an investor and angel private round.
No index on your favorite exchange? Contact Us DemaTrading.ai for more information.
About DemaTrading.ai
DemaTrading.ai was founded in 2021 with a mission to make cryptocurrencies accessible to everyone, regardless of background. Cryptocurrencies have a lot of potential and DemaTrading.ai believes that anyone who wants to participate in the cryptocurrency market should be able to do so. That’s why DemaTrading.ai builds automated crypto portfolios that enable everyone to make smart investments without hassle.
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CEO & Co-Founder
Damien Volhagen
DemaTrading.ai
[email protected]
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