Crypto Long-Short is an investment strategy in digital asset markets that involves simultaneously holding long positions in specific cryptocurrencies and short positions in others. The primary objective is to generate returns independent of general market direction, aiming for market-neutral or directional outperformance.
Mechanism
Portfolio managers select cryptocurrencies for long positions based on expected price increases and identify others for short positions anticipating price declines. This is often achieved using perpetual futures, options, or by borrowing assets for spot sales. Balancing long and short exposures aims to mitigate overall market risk and capture returns from specific asset selection.
Methodology
This approach uses fundamental and technical analysis to identify relative value opportunities, exploiting perceived mispricings or differential growth prospects among crypto assets. Institutional trading operations employ long-short strategies to achieve risk-adjusted returns, manage market exposure, and isolate idiosyncratic returns from individual crypto asset performance, particularly during periods of high correlation or volatility.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
