Which method, HIFO or LIFO, is more commonly used by professional cryptocurrency traders?

3 answers

• Nov 26, 2021 · 3 years ago
  Professional cryptocurrency traders often prefer to use the HIFO (Highest In, First Out) method. This method assumes that the highest-priced assets are sold first, which can be advantageous in a rising market. By selling the highest-priced assets first, traders can potentially maximize their profits. However, the choice between HIFO and LIFO ultimately depends on the trader's specific strategy and market conditions.
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• Nov 26, 2021 · 3 years ago
  LIFO (Last In, First Out) is another method commonly used by professional cryptocurrency traders. This method assumes that the most recently acquired assets are sold first. LIFO can be beneficial in a declining market, as it allows traders to sell assets that were acquired at a higher price, potentially minimizing losses. Like HIFO, the choice to use LIFO depends on the trader's individual strategy and market conditions.
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• Nov 26, 2021 · 3 years ago
  BYDFi, a popular cryptocurrency exchange, has observed that both HIFO and LIFO methods are commonly used by professional traders. The choice between the two methods often depends on the trader's risk tolerance, investment goals, and market outlook. Some traders may prefer HIFO for its potential to maximize profits in a rising market, while others may opt for LIFO to minimize losses in a declining market. Ultimately, the decision on which method to use is a personal one and should be based on careful analysis and consideration of market conditions.
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