Holding stable coin turns out best during bear markets
Some people panic when the market is red. It is common human nature and most of the time panic selling happens. I'm going to suggest a few tips and tricks to not panic during a red market and also the advantage of holding stable coins. A stable coin is the best thing to hold of all the cryptocurrencies we have out there. Holding a stable coin with us is more like holding a purse full of cash even though we are going to make digital payments for our purchases. But don't take it literally, we will be having some wonderful opportunities to make use of the stable coin we hold.
Holding half of our coins as Stable coin
I would recommend holding half of the coins as stable coins. Not financial advice but something that works for me. The reason why I say this is because if the market is red, we have a few opportunities to either invest in a coin that has a good future but is currently very low or feel safe that our portfolio worth is not going down big time.
Having 50% of our holdings in the form of the stable coin gives us two opportunities which is what I'm going to be discussing in this article. I understand we have to be diversifying our portfolio and also be investing in coins that will grow and become big. But to be on the safer side and make use of the opportunities we see at times, it is important to hold half of the coins as stable coins. We can invest during the right time and book profits during the right time and make sure we maintain Stable coin safe.
Interest from Stable coins
There are several interests making opportunities for Stable coin. It can either be directly on-chain or on a centralized exchange. Some of the centralized exchanges give from 7 to 10 percent interest for a stable coin investment. There are also DeFi options for stable coins where we get pain in the form of the DeFi tokens. There is a small risk involved here because DeFi coins usually lose value in long term and the earning we get may not be of great benefit.
I would recommend and suggest using a decentralized platform like Hive where we have a stable coin called HBD and the interest rate is also pretty decent. It used to be 10 percent and now the percentage is 12 which is very great. I'm sure there are no other proper decentralized blockchains that offer 12 percent for a stable coin investment. Getting interested in our stable coin is a safe investment. We don't have to get involved in greater market risks. Even during a bear market, our coin value will stay the same or at least close and gradually recover back giving us a constant 12 percent.
Investing during bear markets
Some people also think about keeping their stable coins in flexible deposits where they can take the money out at any time. There is no locking period. If we take Hive, there are 3 days locking period for HBD. Even if we want to take the money out and invest in something else, it would take 3 days. So flexible deposits on some centralized exchanges can be a good thing. But there again, we have to be a little careful about having the funds on exchanges. That's a separate story altogether.
Coming back to bear market investment, yeah this is the best thing to do. If we have dreams to invest in some coins when it is very cheap, a bear market is the right moment. Even though we have to do our own research, most of the coins stay red during that time and they will somehow give us a minimal profit. There is a risk involved here but if our thoughts are for the long term, then it should be okay.
Here is where having stable coins help. We can quickly jump into a coin that is going down but has great hopes in the coming weeks or months or years. We can also do a quick trade where we can buy during a dip and sell when the market has recovered again. It doesn't really have to be a full investment plan. However, we should be focusing on getting the stable coin holdings back to wait for the next bear market opportunity.
Posted Using LeoFinance Beta
