A neutral strategy in cryptocurrency involves trading or investing in a way that does not take a specific directional bias on the market. It aims to profit from volatility without making a bet on whether the price of a particular cryptocurrency will go up or down.
One common neutral strategy is called pair trading, where an investor takes long and short positions on two correlated assets to offset risk and generate profits regardless of market direction. Another neutral strategy is market-making, where traders profit from the bid-ask spread by providing liquidity to the market.
Neutral strategies can be used by both individual traders and institutional investors to manage risk and generate consistent returns in a fluctuating market. By keeping a neutral position, investors can avoid the risk of being wrong about the market direction and focus on profiting from price movements.
