Stochastic

Bill Gates: "6% of global emissions are cows. You can either fix the cows to stop them doing that, or you can make beef without the cow."

First the people, now the animals? He really doesn’t know when to stop.

Tom Lee: “Buying $BTC now is like getting online in 1996. 95% of investors still have zero exposure.”

Investing Veteran Tom Lee: 🇺🇸 "If you are buying $BTC today, it's still early. 95% of investors have zero $BTC exposure. If you look at wallets, compared to the internet, we're at 1996 levels."

Key Takeaways

A strategic bitcoin reserve is a way for governments, businesses, and institutions to store bitcoin as part of their financial strategy. 

Some consider such a reserve a hedge against inflation. Bitcoin has a fixed supply, so it tends to hold purchasing power over time.

While there are risks, including price volatility and security concerns, bitcoin’s potential as a valuable long-term asset is more recognized.

Introduction

Just like central banks store gold or foreign currencies, bitcoin is also considered by many a valuable asset to hold for the future. With the increasing adoption of digital assets, strategic reserves of bitcoin and other cryptocurrencies are becoming a common topic in finance and policymaking.

What Is a Strategic Bitcoin Reserve?

A strategic bitcoin reserve is a stash of bitcoin that organizations keep as part of their financial strategy. Strategic bitcoin reserves may vary from place to place, but they are often done due to one or more of the following reasons:

Hedge against inflation – Bitcoin has a fixed supply, meaning it can’t be printed like fiat currency, so it tends to hold purchasing power over time.

Diversification – Holding bitcoin adds another type of asset to a financial portfolio, which makes it a common alternative for diversification.

Store of value – Many consider bitcoin a good store of value because of its scarcity and durability. It’s also referred to as “digital gold”.

With more people and institutions recognizing bitcoin’s value, some have started storing it as a reserve to strengthen their financial position.

Why Governments and Companies Hold Bitcoin Reserves

1. Hedge against inflation

Traditional currencies tend to lose value due to inflation. Bitcoin, however, has a predictable issuance rate and a limited supply (only 21 million coins will ever exist). This scarcity makes it an appealing hedge against inflation and a good store of value.

2. Diversifying assets

Governments and institutions usually hold a mix of assets, such as cash, gold, and bonds. Adding bitcoin to their reserves helps them spread risk and avoid reliance on any one asset.

3. Strengthening economic security

For countries with unstable economies or weak currencies, holding bitcoin can act as a safety net. Since bitcoin operates on a global, decentralized network, it’s not controlled by any single country or bank.

4. Corporate treasury strategy

Some businesses hold bitcoin as part of their financial planning. Companies like MicroStrategy and Tesla have invested billions in bitcoin, seeing it as a better alternative to cash.

Trump’s Executive Order for a Strategic Bitcoin Reserve

On March 6, 2025, President Donald J. Trump signed an Executive Order establishing a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. Their goal is to strengthen the country’s role in the crypto and digital asset space.

The reserve will be funded with bitcoin seized by the government through criminal or civil cases. Allegedly, they will treat bitcoin as a reserve asset and maintain it as a store of value (with no intention to sell).

Moreover, the U.S. Digital Asset Stockpile will likely consist of altcoins and other digital assets obtained through forfeiture, with the Treasury Secretary authorized to determine strategies for their management. This initiative seeks to centralize and effectively manage digital assets under U.S. control.

Criticism

While the establishment of a Strategic Bitcoin Reserve has been praised by some as a forward-thinking financial move, the Executive Order signed by President Trump on March 6, 2025, has also faced criticism. 

Opponents argue that holding bitcoin as a national reserve asset exposes the U.S. government to extreme price volatility, which could lead to instability if the market crashes. 

Others question whether it’s right for the government to keep Bitcoin taken from legal cases. Some believe these funds should be returned to their original owners or sold through proper legal channels instead of being added to the reserve.

Additionally, some policymakers worry that prioritizing bitcoin in national reserves could weaken confidence in the U.S. dollar and traditional financial systems. Critics also point out the lack of clear guidelines on how the reserve will be managed and whether it will have proper oversight from Congress, raising concerns about transparency and accountability.

Real-World Examples of Bitcoin Reserves

1. MicroStrategy

MicroStrategy, a business analytics company, has one of the largest corporate bitcoin holdings. Since 2020, it has continuously bought bitcoin as part of its treasury strategy, believing it’s a better store of value than cash.

As of March 2025, MicroStrategy holds 499,096 BTC worth around $42.9 billion.

2. El Salvador’s bitcoin reserve

El Salvador made history in 2021 by making bitcoin legal tender. The government has since accumulated bitcoin as part of its national reserves, using it to promote financial inclusion and economic growth.

As of March 2025, El Salvador holds 6,105 BTC valued at more than $525 million.

3. Tether’s bitcoin holdings

Tether, the company behind the USDT stablecoin, holds bitcoin as part of its reserve assets. The company sees bitcoin as a strong and reliable store of value.

As of March 2025, Tether holds 83,759 BTC worth roughly $7.2 billion.

The Future of Strategic Bitcoin Reserves

The idea of holding bitcoin as a strategic reserve is gaining traction. More central banks and governments are researching how bitcoin could fit into their financial systems. There is also a growing number of businesses investing in bitcoin as a long-term asset. As bitcoin adoption continues to grow, more institutions and governments may view it as a valuable part of their financial strategy.

Closing Thoughts

A strategic bitcoin reserve is a way for governments, businesses, and institutions to store bitcoin as part of their financial strategy. It helps protect against inflation, diversify assets, and strengthen economic security. While there are risks, including price volatility and security concerns, bitcoin’s potential as a valuable long-term asset is becoming more recognized.

Further Reading

Is Bitcoin a Store of Value?

What Is Bitcoin and How Does It Work?

What Is a Stablecoin?

Disclaimer: This article is for educational purposes only. This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

Cryptocurrency trading involves buying and selling digital assets with the goal of making a profit.

To trade crypto, you'll need to choose a reliable exchange, create an account, and understand key trading concepts like trading pairs and order types.

Common trading strategies include day trading, swing trading, scalping, and long-term investing (HODLing).

Traders use technical and fundamental analysis to guide their decisions. Managing risk through proper planning and diversification is essential to long-term success.

Introduction

Cryptocurrency has attracted millions of traders and investors worldwide, from casual investors to financial institutions. But for beginners, the terminology, strategies, and fast-moving markets can be daunting.

Are you considering your first purchase or simply curious to learn more? This guide will walk you through the fundamentals of cryptocurrency trading — including how to get started, the basic terminology, different types of trading strategies, and how to manage risk.

What Is Cryptocurrency Trading?

Cryptocurrency trading refers to buying and selling digital assets on exchanges for the purpose of making a profit. Unlike traditional markets, crypto markets operate 24/7, giving traders more flexibility but also exposing them to constant price changes.

There are thousands of cryptocurrencies out there, but there is a good chance you have heard of some of the most popular ones, such as Bitcoin and Ethereum. In fact, these are the names of the blockchain networks. The tradable crypto-assets are called bitcoin (BTC) and ether (ETH).

How it works

Crypto traders can go “long” (buying an asset expecting its value to rise) or “short” (selling an asset expecting its price to drop). Some traders hold assets for longer periods, while others prefer to move in and out of positions quickly, depending on their strategy and risk tolerance (more on these strategies soon).

You can trade cryptocurrencies against fiat currencies (such as USD, EUR, etc.) or against other cryptocurrencies. The assets you choose and the exchange you use will affect your trading experience.

Before Trading Cryptocurrency

1. Learn the basics

Before diving into cryptocurrency trading, it's important to take some time to learn the basics. Binance Academy’s trading articles and educational courses are a good place to start.

2. Choose a crypto exchange

Choose a reliable and secure cryptocurrency exchange. Ideally, it should have a proven track record, excellent reputation, strong security protocols, and responsive customer support. If Binance is available in your region, you are off to a great start.

For newcomers, beginning with a centralized exchange is recommended. As you gain more experience in crypto trading, you can explore decentralized exchanges (DEXs) at a later stage.

3. Create your account

Once you've chosen an exchange, the next step is to create your account. This usually involves providing your email, setting a password, and agreeing to terms. 

Exchanges often require identity verification (KYC) to ensure security and comply with regulations. You would need to submit a government-issued ID, proof of residence, and any other documents to complete setting up your account.

How to Start Trading Cryptocurrency

1. Fund your trading account

After you create an account, you can deposit fiat currency into your account. Most centralized exchanges allow users to deposit fiat via bank transfers, bank wires, or other common methods. Depending on the platform and location, you may also be able to buy crypto using a credit card. 

If you happen to own some crypto already, you can deposit it into your exchange account. Remember to always send your coins to the associated address: send Bitcoin to your Bitcoin address, ether to your Ethereum address, and so on. Sending crypto to the wrong addresses may result in permanent losses.

2. Choose a trading pair

Cryptocurrencies are traded in pairs (e.g., BTC/USDT, ETH/BTC). A trading pair tells you which assets are being exchanged. For example, in the BTC/USDT pair, you're trading Bitcoin against Tether (a stablecoin pegged to the US dollar).

Crypto-to-fiat trading pairs involve a cryptocurrency and a traditional fiat currency, such as the BTC/EUR trading pair. If the current value of one BTC is 92,175 euros, the BTC/EUR trading pair chart will show the same value as the market price. 

In other words, you need 92,175 euros to buy 1 BTC, half of that to buy 0.5 BTC, and so on. Note that you can buy as little as 5 EUR worth of bitcoin.

Crypto-to-crypto trading pairs involve two different cryptocurrencies, such as the ETH/BTC trading pair. At the time of writing, ether (ETH) is being traded at 0.02285 BTC per unit of ETH.

3. Check the order book

An order book is a real-time, dynamic list of buy and sell orders placed by traders. It provides a snapshot of the supply and demand for a specific asset at different price levels.

Buy orders (bids) list the orders from traders who want to buy, organized from the highest bid price to the lowest. Sell orders (asks) display the orders from traders who want to sell, organized from the lowest ask price to the highest.

Order Book on the Binance App (BNB/USDT).

4. Choose your order type

Market order

A market order is the simplest type of order, in which you buy or sell immediately at the best available price. It’s the fastest way to buy or sell when you don’t want to wait.

Let's say the current highest bid (buy order) for one bitcoin is $100,000, while the lowest ask (sell order) is $100,100. If you place a market order to buy BTC, your order will be matched with the lowest ask, which is $100,100. If you place a market order to sell BTC, your order will be matched with the highest bid at $100,000.

Limit order

A limit order is an order to buy or sell at a specific price or better. It’s a slower way to buy or sell but allows you to set the exact price you want.

For example, if bitcoin is trading for $100,000 but you want to buy it for $98,000 or less, you can set a buy limit order at $98,000. If the price drops to $98,000 or less, your limit order will (likely) be executed, and you'll purchase bitcoin at the desired price. But if the price never drops to your limit price, your order won't be executed.

5. Develop your trading strategy

Think about your trading style and strategy. Every trader is unique, so it’s usually better to create your own trading system and improve it as you go rather than copying other traders. This will help you improve and hopefully achieve a more consistent trading performance in the long term.

Regardless of the chosen strategy, it’s important to manage risk and learn from your mistakes. A trading journal that tracks your trades (including your thought process and decisions) can be incredibly helpful.

Popular Trading Strategies

There are many crypto trading strategies that you can employ, each with its own set of risks and benefits. Let’s go through some of the most popular trading approaches.

Day trading

Day trading is a strategy that involves entering and exiting positions within the same day. In day trading, you’ll often rely on technical analysis to determine which assets to trade. This trading style can be profitable, but it’s challenging and definitely not for everyone. Day trading tends to be more stressful and time-consuming than swing trading or long-term HODLing, so it’s generally not recommended for beginners.

Swing trading

In swing trading, you’re still trying to profit off market trends, but the time horizon is longer – positions are typically held anywhere from a couple of days to a couple of months. Swing trading tends to be a more beginner-friendly strategy, mainly because it doesn’t come with the stress and time-consuming pace of day trading. 

Scalping

Of all of the trading strategies discussed so far, scalping takes place across the smallest time frames. Scalpers attempt to game small fluctuations in price, often entering and exiting positions within minutes (or even seconds). As a form of day trading, scalping is also not recommended for beginners.

In most cases, they’ll use technical analysis to try and predict price movements and exploit bid-ask spreads or other inefficiencies to make a profit. Due to the short time frames, scalping usually has thin profit margins. Scalpers generally trade bigger volumes or dozens of trades to gradually achieve sizable profits.

HODLing 

While not exactly an active trading strategy, long-term investors, also known as "HODLers," aim to benefit from the overall growth of the cryptocurrency market. They buy and hold cryptocurrencies for an extended period, often months or years.

As a “buy and forget” strategy, HODLing is among the least stressful options. It’s ideal for those who believe in the long-term potential of specific assets and are willing to weather short-term price fluctuations. While this strategy requires patience, it can provide substantial returns over time, especially for bitcoin holders.

Technical Analysis (TA)

Technical analysis is the art of interpreting price charts, recognizing patterns, and harnessing indicators to anticipate potential price movements.

Candlestick charts

A candlestick chart is a graphical representation of the price of an asset for a given timeframe. It’s made up of candlesticks, each representing the same amount of time. 

For example, a 1-hour chart shows candlesticks that each represent a period of one hour. A 1-day chart shows candlesticks that each represent a period of one day, and so on.

Daily chart of Bitcoin. Each candlestick represents one day of trading.

A candlestick is made up of four data points: the Open, High, Low, and Close (also referred to as the OHLC values). The Open (1) and Close (4) are the first and last recorded prices for the given timeframe, while the High (2) and Low (3) are the highest and lowest recorded prices, respectively.

Support and resistance levels

Support means a level where the price finds a floor—an area of significant demand where buyers tend to step in and push the price up.

Resistance means a level where the price finds a ceiling— an area of significant supply where sellers tend to step in and push the price down.

The support level (red) is tested and broken, turning into resistance.

Technical analysis indicators

Traders rely on technical indicators to better understand an asset’s price movements. These tools help reveal patterns and highlight possible opportunities to enter or exit trades based on current market conditions.

Popular examples of technical analysis indicators include trend lines, moving averages, Bollinger Bands, Ichimoku Clouds, and Fibonacci Retracement, which can also suggest potential support and resistance levels.

Fundamental Analysis (FA)

Fundamental analysis is a method used by investors and traders to determine the intrinsic value of an asset or business. In crypto trading, it often involves investigating the technology, team, adoption potential, and overall viability of a project.

In crypto trading, fundamental analysis (FA) evaluates the value of a cryptocurrency by analyzing its technology, use case, development team, tokenomics, and adoption.

In crypto trading, FA might also include things like:

On-chain data (e.g., number of active addresses, transaction volume, etc.)

Project roadmaps and news

Community and developer activity

Risk Management in Cryptocurrency Trading

Risk management refers to identifying the financial risks involved with your investments and minimizing them as much as possible. Let’s take a look at a few popular strategies.  

1. Limit your losses 

Make sure you don’t trade more than you can afford to lose. Use advanced order types to lock in profits or protect yourself from losses. For instance, stop-loss orders allow traders to limit losses when a trade goes wrong. Take-profit orders ensure that you lock in profits when a trade goes well.

2. Have an exit strategy

It’s always a good idea to plan for the worst. So, having an exit strategy is an essential way to manage your risks. It's easy to get caught up in a bull market and its euphoria, but having a plan to exit your position can help lock in gains or prevent big losses in case things go bad.

One way is to use limit orders to take profit or place a floor on maximum loss that you can stand. As a general rule of thumb, once you have your exit plan, you should stick to it. Plan your trade and trade your plan.

3. Diversification

Diversifying your portfolio is one way to reduce your overall risk. You can hold a variety of different assets, keep each position at an appropriate size, and constantly rebalance the portfolio, so you won't be too heavily invested in any one asset. This can minimize the chance of oversized losses.

4. Hedging 

Although this requires a bit more experience, you can consider hedging your open positions, which means taking a position in a related asset that is expected to move in the opposite direction of the primary position. The purpose is to offset potential losses.

For example, if you own $10,000 worth of bitcoin and want to hedge against a possible decrease in its price, you could buy a put option for a premium that gives you the right to sell your BTC at $100,000 a few weeks from now. 

If Bitcoin's price falls to $80,000, you can exercise your option and sell for $100,000, significantly reducing your losses. If the price doesn’t fall, you only lose the premium paid while still profiting from the uptrend of your long position.

Closing Thoughts 

Markets can be unpredictable, and cryptocurrency markets are particularly volatile. With continued learning, however, you should be able to become a better crypto trader.

Remember to prioritize risk management in your trading journey. Stay informed about the latest developments in the crypto space, continue refining your skills, and adapt your strategies as needed.

Further Reading

What Is Swing Trading in Crypto?

Crypto Day Trading vs. HODLing: Which Strategy Is Best for You?

A Beginner's Guide to Candlestick Charts

5 Exit Strategies for Traders

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Key Takeaways

SKY and USDS are the native tokens of the decentralized Sky Protocol, representing upgraded versions of MakerDAO’s MKR and DAI.

USDS is a soft-pegged, collateral-backed stablecoin designed to maintain a value equal to or close to one US dollar.

You can trade, save, upgrade tokens, stake SKY, and earn rewards while retaining full control over their funds.

Sky.money is the non-custodial gateway providing 24/7 access to the Sky Protocol’s trading, saving, staking, and governance features.

What Is Sky?

Formerly known as MakerDAO, Sky is a decentralized finance (DeFi) platform that has evolved to offer a more scalable, user-friendly, and community-governed alternative. Sky builds upon MakerDAO’s legacy by introducing upgraded native tokens, new features, and a streamlined governance system focused on resilience and simplicity.

At its core, the protocol revolves around two key tokens: USDS, a stablecoin pegged to the US dollar and SKY, the governance token. Sky.money is the main gateway for you to interact with the protocol while maintaining full control of their assets. 

How Sky Works

Sky Protocol provides you with a range of financial services, including trading, saving, and rewards accumulation, built on an open and transparent infrastructure. The protocol runs on permissionless liquidity pools and a stablecoin system combined with decentralized governance, meaning there’s no middleman controlling your money or decisions.

SKY and USDS are the two native tokens of the Sky Protocol:

USDS: The stablecoin of the decentralized Sky Protocol and the upgraded version of DAI. It is supported by excess collateral and is soft-pegged to the U.S. dollar, aiming to maintain a value equal or close to one dollar. 

SKY: The native governance token of the Sky Protocol and ecosystem, upgraded from MakerDAO’s MKR token. It plays an important role in decentralized governance, staking, and rewarding active participation within the ecosystem.

Accessing the Sky Protocol With Sky.money

Sky.money is the non-custodial gateway that connects you to the Sky Protocol. It allows trading between popular tokens and Sky ecosystem tokens. You can upgrade DAI to USDS and MKR to SKY and access to savings and rewards features through the platform. You can also participate in the Sky Savings Rate (SSR) to earn additional USDS or access Sky Token Rewards in the form of SKY tokens through the Sky.money app.

Through the app, you can:

Upgrade MKR tokens to SKY at a ratio of 1 MKR to 24,000 SKY.

Trade USDC, USDT, ETH, or USDS for SKY directly.

Earn SKY rewards by supplying USDS to the Sky Token Rewards module.

Stake SKY tokens in the Sky Protocol’s Staking Engine to earn rewards.

Borrow USDS by staking SKY tokens.

Alternatively, you can also buy SKY on cryptocurrency exchanges like Binance.

Sky Savings Rate (SSR)

The Sky Savings Rate is an automated system that lets you earn compounded USDS over time. When you deposit USDS into the SSR module, they receive sUSDS tokens that represent their stake and any earned value. USDS tokens are added to the pool every few seconds according to the current SSR rate, causing the value of their sUSDS to grow.

You can redeem sUSDS anytime for the original USDS plus any accumulated rewards. The SSR rate fluctuates based on decisions made through decentralized on-chain voting by the Sky Ecosystem Governance community. Smart contracts automatically handle the conversion between USDS and sUSDS, ensuring they maintain equal dollar value with no fees when redeeming.

Sky Token Rewards (STRs)

USDS holders can take part in the Sky Token Rewards module to earn SKY governance tokens as rewards. Both the supplied USDS and the rewards earned are secured in non-custodial smart contracts, ensuring that no third party has custody of the assets. Rewards are distributed based on each user’s share of the total USDS held in the rewards pool and may vary according to changes in pool size and issuance rates. By holding USDS and earning SKY rewards, you can support the Sky ecosystem projects while retaining full control over their funds.

Skylink

SkyLink is the bridging system that connects Sky with multiple Layer-2 networks such as Base, Arbitrum, Optimism, and Unichain. It enables you to move your Sky tokens like USDS and SKY, and use features like the Sky Savings Rate, without paying high gas fees or waiting long for transactions to complete. For everyday users, SkyLink makes interacting with the Sky ecosystem smoother and cheaper, so you can save, trade, and earn rewards more efficiently across multiple blockchains.

The Sky Ecosystem and Sky Stars

The Sky ecosystem is a community-driven network of decentralized projects known as Sky Stars. These independent projects foster rapid innovation and growth within the larger Sky framework. Each Sky Star may have its own governance tokens, treasury, and community governance, while aligning with the overall goals of the Sky ecosystem. Spark, an on-chain asset allocator that deploys stablecoin liquidity across DeFi, CeFi, and real-world assets, is the first official Sky Star and will integrate closely within the Sky ecosystem. 

Closing Thoughts

The Sky Protocol represents a meaningful step forward in decentralized finance by evolving the widely known MakerDAO ecosystem into a more scalable, user-friendly, and community-governed platform. Through its native tokens SKY and USDS, alongside innovative features like Sky.money, SkyLink, and Sky Stars, the protocol aims to broaden DeFi participation and create more reliable, non-custodial financial tools.

Further Reading

What Is a Stablecoin?

What Is the Stablecoin Trilemma?

What Is Spark (SPK)?

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.