How to not panic sell during a red market and trust stable coins?
The best dumb answer to this question is to have funds that will not be affected if the entire market is red. Is that even possible? I think it is possible. There are a few coins that we can trust and hold so that they won't get affected during a red market. There will be a small considerable impact during a very bad market but they will definitely heal back because they are supposed to be like that. These are nothing but stable coins.
The best way to not panic during a red market is to hold a considerable amount of stable coin with us. By doing so, we will not be affected much even if the market goes down. We will be affected only if the fundamentals of the stable coin are affected. In addition to that even if the price of the stable coin we hold goes down, it will only be momentary. It should heal back if it is actually a stable coin. I'm not going to say that having Stable coins as holdings is the only way to not panic during the red market but it is one of the best ways is what I feel.
Preferrable stable coins
There are many stable coins that can be of our preference. For me personally, I think HBD is now the best among them and I have most of my stable coin holdings in the form of HBD. Not financial advice but I do strongly recommend investing in HBD. The main reason is that it gives a decent 12 percent interest now.
After HBD my next personal stable coin preference is BUSD, the reason is that there are also investment options on BUSD. There are some DeFi options available for BUSD. In addition to that, if we want to make payments for some of the services with crypto, some websites and businesses support BUSD as their payment from Binance or directly. Binance smart chain is getting popular with that.
The next preferable stable coin would be USDT. I was not using this earlier just because it was transacted on ETH and the charges were insane. Now that USDT support is available on multiple chains, the transactions become easier. For example, if I use the Tron chain to move the USDT from one exchange to another, I get no charges.
Keeping the funds as stable coins and getting a decent interest for the same is better than holding some coins that are risky. But yeah we are in the crypto world and some risk is good and that's how we can see a good income coming our way.
Interest from Stable coins
As I mentioned earlier, stable coins are the best source of stable income in the crypto world if we are clear on what we choose and where we invest. In my case, I trust HBD and the 12 percent interest I get for my holdings is very good. In spite of Hive prices going up and down, HBD is pretty stable fluctuating from 90 cents to 1 dollar and 5 cents. I did not see it go below that but even if something like that happens, it immediately heals back.
There are both centralized options as well as decentralized options to get interested from stable coins. Exchanges like crypto.com and Binance offer interest for stable coin holdings. If we are lucky we will also be able to get high interest but the risk is always there for holding the coins on exchanges instead of blockchains directly. That's another reason why I prefer HBD investment.
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Your strategy holds true, I hold DAI myself as a hedge against a downturn, then use my DAI to buy back crypto when its low. The only thing with stablecoins is that we can miss out on returns during a bull run too.