What are Covesting and the COV Token: The Ultimate Guide (2021)
In the lead up to what looks to be the next major bull run in the cryptocurrency space in 2021, one of the most hyped trends for the past 12 months, covesting, is gaining a lot of attention with crypto analysts that are predicting that its native cryptocurrency, the COV token, may be one of the top performing cryptoassets of the year.
Covesting has grown at a rapid pace over the past few years since it launched in 2017 as the cryptocurrency market’s first form of copy trading, and in that same year via an ICO was able to raise more than $18 million in funding.
This guide takes a deeper look at what covesting and the COV token are, and their potential impact on the cryptocurrency market in 2021, as well as detailed analytics on how COV may be one of the best investments of this year .
Covesting: The First Form of Crypto Copy Trading
What is Covesting?
Covesting is the world's first form of crypto-based copy trading and has been one of the most hyped and prominent trends within the cryptocurrency market over the last few years since its launch in 2017.
Covesting has allowed crypto traders and investors for the first time to be able to come together in a seamless and efficient way, and to be able to collaborate in the cryptocurrency market in order to share resources and to create mutually-beneficial situations that were completely unprecedented before the launch of this revolutionary new way of trading.
The rapid growth of the popularity of covesting since its launch is testament to the range of different forms of value that users are able to enjoy by using the Covesting module on PrimeXBT in order to find other cryptocurrency users, connect with them, and collaborate in order for all parties to be able to improve the outcomes of investing their capital in cryptocurrencies.
Why is Crypto Copy Trading So Popular in 2021?
When covesting first launched in 2017 there were no other platforms that offered cryptocurrency copy trading in any kind of significant way, however there was a large unmet demand for copy trading in the cryptocurrency market which was fuelled by traditional asset traders being able to copy trade stocks and foreign currencies and then coming to the crypto market with the hopes of gaining the same sorts of advantages that they are used to experiencing in the traditional asset market.
However, instead of being able to find copy trading in the crypto space, for a majority of the life of Bitcoin, traditional as a traders have not been able to copy trade cryptocurrencies, and it was only with the inception of covesting that this became possible for the first time.
Once covesting was launched and cryptocurrency users began connecting with each other and collaborating with the use of covesting, it quickly became apparent that their outcomes in the market were vastly superior to when they were solo trading, and as such, the reputation of covesting spread by word of mouth at a rapid pace over the past few years to a point today where there are more traders and investors in the cryptocurrency market than ever before that covest on a daily basis.
The Structure of Covesting
The basic structure of how covesting works is that experienced traders known as “strategy managers” create peer-to-peer investment funds on the Covesting module which are tied to their strategies specifically, and that a large amount of different data and information is publicly available for potential investors to analyse.
Other users known as “followers” will then select the strategies that they would like to follow and invest their capital into, and by doing so their capital will then copy the same trades that the strategy manager executes through the fund, with this meaning that they will then share in the same return on investments that the strategy manager is able to generate.
As a reward for providing this unique and powerful opportunity for their followers, strategy managers are given a success fee of 20% of all of the profits they are able to generate on behalf of the followers on the Covesting module.
PrimeXBT’s Covesting module
In late 2019, it was publicly announced that Covesting would be partnering with the world's largest multi-asset margin trading platform, PrimeXBT, in order to build a new module that would be integrated into the core of the PrimeXBT platform and allow the huge number of cryptocurrency traders and investors there to have direct access to covesting.
Immediately, excitement and enthusiasm for this partnership could be seen throughout cryptocurrency social media and even the price of COV reflected the positive response to this partnership with positive price growth as a result of this.
Following a number of months of development partnership work between both platforms, PrimeXBT's Covesting module was completed as a beta and launched in April 2020, opening up a range of new tools and features for users of PrimeXBT to access for the first time in order to dramatically improve their outcomes in the cryptocurrency market.
Covesting module Beta
The beta phase of PrimeXBT's Covesting module began in April 2020 and saw a large number of new users join the platform in order to be able to access covesting there, as well as a large number of PrimeXBT's user base experimenting with covesting in order to ascertain exactly how beneficial covesting could actually be.
The beta phase of PrimeXBT's Covesting module round for the following 4 months until August 2020, and at this point it was announced that the beta was a resounding success following the investment of more than $1 million in equity by followers into different funds throughout the 4-month period.
Complimenting this positive metric was the fact that the top performing strategy managers throughout the 4-month beta were able to generate up to 1,800% ROI for their followers, with this clearly representing dramatically higher levels of profitability than a majority of retail cryptocurrency traders and investors are able to attain for themselves, with this confirming the value of using the Covesting module.
The Synergy of Covesting and PrimeXBT
The partnership between Covesting and PrimeXBT was clearly synergistic from the beginnings, being that both platforms bring a different aspect of cryptocurrency trading and investing to the market, while both platforms are renowned for their rapid growth over the past few years as well as the high quality of the services and tools that they provide.
In fact, Covesting.io and PrimeXBT are two of the leading innovators in the cryptocurrency industry In 2021, both platforms pushing the boundaries of what cryptocurrency trading and investing actually is by introducing new and cutting edge systems of interacting with global crypto markets, while both platforms have seen some of the highest levels of growth over the last year or two in particular that had been seen anywhere in the cryptocurrency market.
The introduction of the Covesting module on PrimeXBT allows users now to be able to enjoy the myriad of benefits of using PrimeXBT such as low fees and high security, while also being able to access the range of benefits from covesting including the reduction of risk significantly and the ability for experienced traders to maximise their revenue in the market.
Advantages of Using Covesting
Strategy Managers: Increased Revenue
The biggest advantage for strategy managers on PrimeXBT's Covesting module is the ability to be able to dramatically boost their revenue by creating additional revenue streams from the capital that is invested into their strategies by followers.
While strategy managers are already generating an income from their own capital being invested into their strategies, they also generate an additional 20% on all the profit from the capital that is followed into their strategy, with this representing a significantly larger amount of revenue than they would usually be able to generate without the Covesting module.
As well as this, strategy managers are able to achieve these high levels of revenue generation without also needing to increase their own capital exposure, being that they don't have to take risky strategies such as using high levels of leverage or taking out loans, but instead can use the capital of the followers in order to boost the revenue.
Followers: Reducing Risk Dramatically
The most obvious benefit for followers on the Covesting module is they are able to dramatically reduce the risk by putting the capital in the hands of some of the top performing traders in the market, with this often turning their fortunes from consistent losses to consistent gains.
Many followers are inexperienced traders or investors that are new to the cryptocurrency market and that lack the necessary experience and skill set in order to be able to reliably generate profit with their trades.
Instead of having to spend months or even years perfecting their craft until they can reduce their own risk themselves, they can take a shortcut to profitability by putting the capital in the hands of strategy managers that have a proven track record of generating consistent profits.
Both: Transparency of Data
One of the major advantages of using PrimeXBT's Covesting module for both strategy managers and for followers is the significantly more ubiquitous data and information that is provided throughout the module for followers to be able to use in order to gain a deeper understanding of the investment opportunities that are available to them.
This obviously assists followers in their ability to accurately understand which strategies have the likelihood of generating long-term consistent profits, with information such as the historic profitability of its strategy, the levels of margin that has been used by the strategy manager, and the total amount of capital invested into each strategy assisting followers in this goal.
Likewise, strategy managers that are able to reliably generate profits and help from other strategy managers will reach the top of the table on the module and will be able to have the data and information relating to the strategies act as an advertising tool that draws in further amounts of investment automatically.
The COV Token
What is COV?
COV is the native cryptocurrency of the covesting ecosystem and was created in 2017 during the ICO of Covesting that saw the project raise more than $18 million in funding as a result of the huge demand for crypto copy trading that they were providing for the first time.
The COV token has outperformed a majority of other cryptocurrencies over the past 12 months as it has grown by more than 1,000% in value, with this largely being as a response to the rapid growth of covesting and of the introduction of a new range of ways that the COV token can be beneficially used.
The COV token has a current all-time high of $3.28 and this is the target for 2021’s bull run for many COV investors that are aiming to ride the price growth of COV back to above $3 and beyond.
How is COV Used?
COV is used by covesting users to unlock a range of different benefits and advantages that can be used to cut the cost of using the Covesting module while also increasing the revenue that they are able to generate from doing so.
The COV token is used primarily for strategy managers and followers to unlock for specific COV token utilities, each of which either works to increase the demand for COV or to drop the overall supply of COV, with this meaning that as covesting users use the COV token to unlock these utilities that token holders will also gain the benefit of COV becoming more scarce over time.
Upon the announcement of the new COV token utilities that have recently been introduced into PrimeXBT's Covesting module, the market reacted enthusiastically with a large amount of COV token buying throughout the markets and in general the response from both long-term COV holders as well ascovesting users was very positive.
The Top Holders of COV
From looking at the distribution of the top 100 COV holders, we can see that there is a decentralized spread of ownership with no one account having too great a control over total COV supply, with this being the ideal kind of token distribution and a positive reflection on COV.
It will be interesting to see how COV token distribution involves as the marketcap of the token inevitably balloons throughout 2021, and there is of course the hope that this kind of distribution with a relatively even spread across many accounts will be maintained as more and more investment floods into the COV market.
What can be seen with many other tokens in the cryptocurrency market is that there are a few huge accounts that control a significant percentage of the total token supply, with this leading to high levels of centralisation and the ability for users to easily manipulate the market, however this does not seem to be the case with COV at all.
New COV Token Utilities
Followers: Remove 1% Entry Fee
Followers are now able to buy and spend the COV token in order to remove the 1% entry fee that is charged to followers when they follow a new strategy manager for the first time.
Recently it has been introduced that a 1% entry fee will be applied to any followers that are selecting a new strategy manager in order to follow, with this being implemented as a means of increasing follow loyalty for strategy managers and creating stronger partnerships between them on the Covesting module.
The impact of being able to reduce the cost of following new strategy managers is something which over the long term will yield significant benefits to followers, with the 1% entry fees that they will save adding up to becoming a significant amount over time.
Followers: More Success Fees
Whenever a strategy manager successfully executes a trade that generates profit for their followers a success fee is generated which is split between the strategy manager, each follower, and the Covesting module itself.
The second COV token utility is the ability for followers to spend an amount of COV in order to tip the balance of the split between all 3 parties in their favour and to retain more of each success fee that is generated upon successful trade completions.
As with the first token utility, the ability for followers to retain more of each success fee that is generated will have a significant impact on the overall profitability over time, with the additional amounts of each success fee adding up to become significant.
Strategy Manager: Lower Trading Fees
Strategy managers are able to lower their trading fees by up to 75% by spending an amount of the COV token in order to unlock this new utility that can have a profound impact on the cost of trading on the Covesting module.
Strategy managers can spend either the equivalent of $250 of COV, $500 of COV, or $750 of COV in order to unlock a trading fee reduction of 25%, 50%, or 75% respectively, with this ability to reduce their trading fees being something that many strategy managers have already enthusiastically adopted.
Strategy managers being able to cut their fees by up to 75% will mean that more of the profit that they generate through the capital that they put into their strategies, as well as the capital that their followers have invested into strategies will remain in their pocket and will contribute to their overall revenue.
COV Token Burn Program
The 4th and final COV token utility which has been announced is that an amount of up to 50% of all trading fees generated on the Covesting module will be used to buy and burn COV from the open market periodically.
With this dramatically impacting the scarcity of COV and leading to all COV holders enjoying increased utility value of their COV holdings over time.
The COV token burn program is an important step in the future of covesting which will lead to a strengthening of the COV token, both from the perspective of its financial value, but more importantly from the impact that has on the utility of the token and of the utility value that token holders have when they use the Covesting module.
One-Off Burn of Almost 1% of All COV
The team behind Covesting announced a burn of almost 1% of all COV tokens in existence to celebrate the release of the 4 new COV token utilities at the end of 2020, with the total amount burned being 186,127 COV and this immediately having a dramatic impact on the price of COV in the open market.
This is the first time that such a significant number of COV tokens have been burned and it complements the new COV token burn program where there will be periodic burning each month of an amount of COV that equates to up to 50% of all trading fees that are generated by the Covesting module.
Both from long-term COV holders and from covesting users as well, the news of such a large number of COV tokens being bought and burnt from the open market, meaning that they will be gone forever and that the scarcity of COV has now increased significantly, has been enthusiastically welcomed by them.
Estimating the Monthly COV Token Burn
While there is relatively limited data available in order to use to make an accurate estimation of what the impact of the COV token burn program will be each month, there is a significant enough amount of public data in order to make a best guess on what the case may be.
There is actual data which can be found publicly from the Covesting module itself and also the PrimeXBT website, as well as some assumptions that are based on other similar models and how they have behaved historically.
As of December 2020 there were 250 strategies, there were 1650 followings, there was a value of $2.3 million for all current followings, the share of profitable strategies was 44%, and the average profitability was 131%.
We can assume that every unique follower follows at least 3 different strategies simultaneously and will get the number of unique followers, as 1650 ÷ 3 which makes 2130, we can also assume that 10% of traders will be using the trading discount which comes to 25 traders, and we can also assume that 10% of followers will use the 1% entry fee which makes 213 active are utilisations.
Also we can assume that 10% of followers will use the 5% success fee improvement, as well as the assumption that the average covesting success fee is 15% from all profitable trades, while we can finish by assuming that covesting will burn 100% of fees collected as per the COV token activations and 35% of other fees collected without utility.
With all of this taken into account we can see that there will be a monthly token burn of 226,950 COV, which will represent a significant amount of COV tokens that will be burned each month and will have a dramatic impact on scarcity.
What is the Growth of PrimeXBT’s Usage Currently?
To further extend the previous calculation, we can see that the traffic on PrimeXBT and its usage is increasing by 20% month-on-month, with this representing one of the strongest traffic growth of anywhere in the cryptocurrency market.
From this we can see that the following progression would be logical.
We can see that throughout 2021, where the size of the crypto market is increasing anyway because of the bull run, the size of PrimeXBT’s traffic and usage is also increasing rapidly and this will have a dramatic impact on the amount of COV that is cut from the market month-on-month.
Why COV is a Diamond in the Rough
Upon looking at the COV token, its metrics and historic performance, and covesting in general in greater depth, it becomes obvious that COV is a diamond in the rough for a number of reasons and that it may have hidden growth compared to many other altcoins in the crypto market this year.
The CRV token is an exchange token in the same way that BNB is used on Binance, and the huge growth of the value of the BNB token may be mirrored this year for the COV token as it is used to unlock a range of utilities on the trading platform in the same way that BNB unlocks a range of utilities on Binance.
The recent introduction of 4 new COV talking utilities on PrimeXBT Covesting module is a powerful step forward for the COV token as well, with the increased scarcity that these new token utilities will cause having the potential to fuel a significant increase in the price of COV compared to its current position, and this is especially taking into account the impact that the COV token burn program will have if the projected amounts of COV are burned each month.
Previous All-Time High
Another big factor in the potential for price growth for COV in 2021 is the previous all-time high that was set in 2017 at $3.28, and its relation to the current price of COV.
While the COV token has increased by more than 1 000% in value over the past 12 months, there is still a long way to go in order to get back to the all-time high of $3.28 that was set in 2017, however this is precisely what many cryptoanalysts are predicting in 2021’s bull run, with the target being to reach the all-time high that was previously set and even to move past it.
This obviously presents a much greater opportunity than many other tokens that are already at their all-time highs or don't have very far to go, where the price growth is likely to be significantly less.
The Exponential Growth of Covesting
The third and final factor in predictions for the price growth of COV this year is the exponential growth of covesting since its launch in 2017 until now, and in particular the massive growth of usage and trade volume on the Covesting module since it was created and integrated into PrimeXBT.
As the number of users on the Covesting module increases, the demand for COV will undoubtedly increase throughout 2021, and as this occurs the price of COV will increase as demand forces scarcity upwards.
This is a big opportunity to use the Covesting module in order to be able to gain significant advantages in the market, but then by using the Covesting module also then enjoy the price increases of the COV token that may occur as the number of users on the platform increases.
In Conclusion: What are Covesting and the COV Token
The metrics behind the COV token are some of the strongest is in the cryptocurrency market, and the price growth of COV over the past 12 months of more than 1,000% is unsurprising with everything taken into account regarding the growth of covesting and its impact on the crypto industry.
As we look towards what the next 12 months will have in store for crypto investors, many are looking for strong investments in the market with good fundamentals and strong tokenomics as well, with COV ticking all of these boxes and introducing a range of new token utilities that will work to increase the scarcity of the COV token in parallel to the growth of covesting this year.
If you would like to learn more about the COV token and its tokenomics, or about covesting in general and how to get involved with the Covesting module on PrimeXBT, check out this link.