What it means
Crypto is volatile and never closes. It can be traded spot (you own the coin) or through perpetual futures. Exchange risk, leverage and liquidation cascades are risks specific to crypto.
In practice
Crypto trades every hour of every day, so there is no closing bell and weekend moves count. Many traders focus on Bitcoin and Ether, where liquidity is deepest, and treat smaller coins as higher risk because their order books are thin.
Bitcoin often sets the direction for the rest of the market. Volume and volatility still tend to rise during the London and New York sessions, even though the market never shuts.
What to watch for
Coins held on an exchange are only as safe as that exchange, and leverage of 50 or 100 times is offered freely. A normal daily swing in crypto is enough to liquidate a highly leveraged position.
Related terms
4 terms- Perpetual futuresCrypto futures with no expiry date, kept close to the spot price by regular funding payments.
- Funding rateRegular payments between longs and shorts on crypto perpetual futures that keep their price near spot.
- HalvingThe cut in new Bitcoin issued per block, every 210,000 blocks (roughly every four years).
- LiquidationYour broker or exchange force-closing a leveraged position because your margin ran out.