MultiHODL - Multiply Your Crypto Trading Position up to 50x on YouHodler
YouHodler is a cryptocurrency platform that’s best known for its crypto lending products. On YouHodler, users can deposit their cryptocurrency to earn yield, or use crypto as collateral to borrow funds. The platform also offers a crypto exchange service that allows users to swap between different cryptocurrencies, as well as an especially interesting product called Multi HODL.
What is Multi HODL?
Multi HODL is essentially a way to access leverage for YouHodler users. Most often, users who want to trade crypto with leverage do so through futures contracts. MultiHODL, on the other hand, allows users to access leveraged crypto trading in a different way.
Users who have funds in their YouHodler wallet can allocate a portion of their assets to Multi HODL. The way Multi HODL achieves leverage is by making a chain of crypto-backed loans. Multi HODL can be used to go either long or short on a specific cryptocurrency, so it can be used to turn a profit even if the market conditions are bearish.
Borrowed funds are used as collateral to purchase more crypto. Essentially, the leverage increases the more times this process is repeated. The available leverage ranges from 2x to 50x. Higher leverage brings higher risk, but also higher potential rewards. Note that on YouHodler, the leverage is referred to as the “multiplier”.
Recently, YouHodler has added support for new trading pairs to Multi HODL which make it possible for users to essentially access the forex markets in addition to the crypto markets. Here are the trading pairs containing assets tied to fiat currencies:
- PAXG/USDT
- EURS/USDT
- TGBP/USDT
- TCAD/USDT
- TAUD/USDT
- XCHF/USDT
Try Multi HODL on YouHodler Now
Using Multi HODL
Multi HODL can be accessed through the YouHodler app or desktop interface in two way. The first way is to use the dedicated Multi HODL section, but you can also access it by pressing the “Boost” icon on the cryptocurrency you want to go long or short on.
Here’s an example of what setting up a Multi HODL position looks like:
Here, we’re setting up a Multi HODL position on the BTC/USDT pair. We’re going long in this example, as indicated by the arrow in the top right corner of the interface. If we wanted to go short, we would simply select the arrow that’s pointing downwards.
Under “Amount”, we input how much USDT we want to commit to the position. In the worst case scenario of liquidation, this is the maximum amount we stand to lose.
In the “Multiply” section, we can select the amount of leverage we want to use. In this example, 200 USDT in margin is being leveraged 20x, resulting in a position worth 4,000 USDT. Keep in mind that 20x leverage is quite high, and is rarely used in real-world trading situations for assets as volatile as crypto.
In the “Adjust TP & SL” section, you can set up take profit (TP) and stop loss (SL) levels. A stop loss is especially important, as it will limit the loss you will take if the market moves against your position. The stop loss is important to avoid the margin call level, which is the price at which your position will be liquidated. In this scenario, you would lose all the funds that you committed to open the position.
Setting up a take profit order is optional, but still very useful. When set up, a take profit order will automatically close your position and secure profits once the position reaches a certain profit.
Depending on your risk tolerance, it can make sense to allocate a portion of your portfolio on YouHodler to Multi HODL. This way, you can keep the majority of your funds in safer products, while utilizing a small portion of your overall funds in the riskier Multi HODL product with higher potential upside.
Who is Multi HODL for?
Multi HODL is designed for users that have a higher risk tolerance, as well as advanced traders with a lot of experience in the markets. Leverage amplifies your buying power, SO even small market movements can translate into substantial profits.
However, the same is true on the other side of the coin. You probably shouldn’t be using Multi HODL if you have a low risk tolerance, as leveraged trading can lead to losses very quickly in the cryptocurrency market.
In any case, it’s not recommended to use your entire crypto portfolio in leveraged trading products like Multi HODL.
According to YouHodler, the product was inspired by the “Barbell Strategy”, an approach to investing where a large portion of an investor’s portfolio (for example 90%) is allocated to safer investments, while a small portion of the portfolio (for example 10%) is allocated to high-risk, high-reward investments. In this way, an investor can limit their downside while still getting exposure to potentially large profits.
What are the risks of Multi HODL?
The most you can lose when using Multi HODL is the initial capital committed to the position. For example, let’s say that you have 1,000 USDT in your YouHodler wallet, and use 100 USDT to go long on Bitcoin with 5x leverage through Multi HODL. Then, a bad news event triggers a sudden crash in the Bitcoin market, leading to a margin call and the position being liquidated.
In this case, you would lose 100 USDT (the initial amount you committed), while the rest of the USDT in your YouHodler account would remain untouched.
The risk increases along with the amount of leverage you use. For example, if you go long on a cryptocurrency with 50x leverage, the price would have to drop by about 2% for your position to be liquidated.
The bottom line - Multi HODL is a simple way of accessing leverage for YouHodler users
The Multi HODL product provides a very simple way for YouHodler users to access leveraged cryptocurrency trading. While most YouHodler users will likely stick to the platform’s passive products, those high a higher risk tolerance can potentially benefit from using a small part of their portfolio in Multi HODL.
The product caters to more conservative traders as well as “degens”, as it offers leverage up to 50x—while such high leverage will rarely come in handy, it never hurts to have more options.
