Advantage and Disadvantage of BCH Price in smartBCH DEX Trading

Have you thought about how you really gain in buying and selling SEP20 tokens on smartBCH? Of course, it’s when you buy at a lower price and sell at a higher price. That’s basic but there are scenarios that even if the token you bought didn’t pump hard, you can generate profit depending on BCH mainnet price.

I’ll give you scenarios where you can have a better understanding of how BCH price can have an impact on your smartBCH trading journey, to understand the basics so you’ll know how you gain some profit and best options to maximize more profit. The advantage and disadvantage when BCH mainnet price goes up and down.

Advantage when BCH price is very low in selling SEP20 tokens

The last time before the market sank, I bought $CATS at $0.0050 thinking it was dip already but as usual, after buying it dips even more lol. I bought 1 BCH and gives me 106,470 CATS.

Now (12-30-21, 10:30AMPHT) the value of BCH in dollar is $429, it’s too low. I was checking marketcap.cash to check if any of my tokens pumped. I’ve seen that $CATS is slowly recovering.

I calculated my $CATS holdings to its current price and it was already at break-even with 0.01 BCH in profit.

Calculation:

Solution 1: Number of $CATS x current price of $CATS equals value of cats sold.

Solution 2: Value of cats sold divided by the current price of BCH

  • 106,400× $0.0041 = $436.24
  • $436.24÷$429 = 1.016 BCH
  • Capital = 1 BCH
  • Profit = 0.016 BCH

Let’s say I’ll sell my $CATS at my buying price which is $0.0050, I will have 0.24 BCH as profit.

Calculation:

Follow the solution explained above.

  • 106,400 × $0.0050 = $532
  • $532 ÷ 429 = 1.24 BCH
  • Capital = 1 BCH
  • Profit = 0.24 BCH

Conclusion

Therefore, when BCH mainnet price is down, selling smartBCH tokens will have a higher chance for profit-making even if your tokens did not pump that hard. It’s an advantage in making a profit on your smartBCH Dex trading.

When BCH price is rising it means you cannot make a huge profit on your trades, not unless your token pumps hard, whereas if BCH price is down your profit would be doubled.

Disadvantage when BCH price is very low in buying SEP20 tokens.

Now let’s proceed what’s the disadvantage if BCH price is down in buying SEP20 tokens.

Just look at the numbers of $CATS to be bought with 1 BCH it’s only 95,380.20 CATS despite that the current price of it is only $0.0045 as of continuing writing this article (12-30-21, 10:00PM PHT)

While the current price of BCH is only $433+.

$433 ÷ $0.0045 = 96, 222 (this should be the digits but maybe due to slippage the buyer will only receive 95,380)

Compared to the last time I bought I had 106,470 CATS with my 1 BCH even if the price is higher than the current price ($0.0050).

This is because the last time I bought BCH price is still high, I cannot remember the BCH price but upon calculating it was $532.35, I’ll show you the calculation below.

Solution: BCH price divided by the price of cats

  • $532.35 ÷ 0.0050 = 106, 470

That’s the total CATS I bought last time image shown above.

This isn’t accurate though because slippage is not included in this calculation, this is just to show you how to find out the BCH price when I bought it last time.

What’s the solution if BCH price is down but you want to have more tokens?

In every disadvantage, we can always find solutions to that, it’s where the stable coin plays a vital role as it doesn’t fluctuate much and the ratio is 1:1.

There are also stablecoins on smartBCH such as;

  • flexUSD
  • SBUSD

So if you want to prepare something if BCH price dips and SEP20 tokens dip, try securing stablecoins to take advantage of buying the dip for maximum profit.

Disclaimer: This is how I understand BCH price impact on SmartBCH tokens, if I understand it wrong feel free to correct me. But based on the calculation it appears to be precise, yet I’ll accept corrections if ever I got it wrong.

Final Say

That is how BCH price made an impact on your buying and selling journey on sSmartBCH DEXs.

You have to pay attention to BCH price if you want to have better profit makings.

P.S I wrote this the other day when BCH price was still high.

Thank you for reading!

This article was first published on read.cash by Eybyoung.

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