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Whether trading oil futures or Tesla Inc. (NASDAQ: TSLA) stock, knowing when to enter and when to exit can mean the difference between handsome returns and financial ruin. Prices rise and fall, sometimes very quickly. And nowhere is this more true than the crypto market.
The extreme volatility is precisely why there is major money to be made and, by the same token, lost. If timed poorly, investors can lose big. As singer-songwriter Kenny Rogers so eloquently put it, “You gotta know when to hold ’em, when to fold ’em.
If, for instance, you bought Bitcoin (CRYPTO: BTC) in the summer of 2021, you would have watched your investment double in a few short months. Prescient – or more likely, lucky – traders took profits that October, locking in their massive gain. Many more made the opposite trade. They bought at the peak in October and watched as their investment almost halved in just a few weeks.
This is the game that must be played. Steps can be taken to mitigate losses and maximize upsides. Strategies can be formed, hours of research performed, but ultimately the future is unknowable, especially in the crypto market.
The new project Seasonal Tokens says it hopes to provide a system that can be predicted, at least to a certain degree. The project is made of four tokens meant to be traded between – Summer (CRYPTO: SUMMER), Autumn (CRYPTO: AUTUMN), Winter (CRYPTO: WINTER) and Spring (CRYPTO: SPRING). The relative values of each token are influenced by changes in each token’s mining difficulty and farming rewards.
These two factors influence the classic economic see-saw; the former restricts supply, while the latter drives demand.
These mechanisms, which operate by predictable schedules, might give traders options. Take, for example, WINTER being the most valuable token. In this case, SPRING will be the cheapest because of meager farming rewards and easy mining. This gives holders of WINTER the option to trade into SPRING, gaining more tokens and knowing that SPRING will become more valuable in time.
The relative mining difficulties and farming rewards are adjusted, making SPRING rise in value and WINTER fall in value. This cycle continues, with each season leading into the next, and in this way, traders may be able to continuously increase the number of tokens they hold.
Will this system prove to be successful and reduce uncertainty in its market? If so, it could be an interesting and unique value creation project.
If you are interested in learning more about the project, check out https://seasonaltokens.org/.
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