On my previous article called "How to make money in volatile crypto markets " i talked more on how to invest and make money taking advantage of those huge swings highs and lows. It was a lovely article and i hope it will help lot of people to make money on different crypto assets. On this one i a m going to do a breakdown of the 2 types of coins that we have to carter for those who don't have an idea on how they should take their profits when they make an investment on crypto assets. We have Stable and Non Stable coins and we a going to look into these and see how they work.
Non Stable Coins
These types of coins are the so many on the crypto market and their value is always fluctuating. They can be called volatile coins because they can rise or fall within a short space of time. They are the best coins to invest in if you are looking to make money through buying and selling of coins.
These type of coins were are talking about include Bitcoin, Ethereum, Binance and so many others. If you check the price of Bitcoin when it was first launched in 2009 it was being valued at $0.02 per coins and now its value is $63,476.60 per coin. i am sure you can see the huge rise it had and now it seems like it is consolidating but for you to take out your position and realize your profit you will have to sell those bitcoins be it ethereum, ripple or whatever coin that you have but the question is. How do you take your profit when coins are falling or when they are still on their pick? Stable coins is the answer to this question.
Stable Coins
These type of coins are the answer to our prayers. Lets look into it and see what are they, how they operate and how are they an answer to our problem. Firstly these type of coins are called stable in the sense that they have a stable value and does not move that much. They include Tether USD, USDC, DAI, Paxos and many more, the price is mostly pegged at $1 per coin. These coins are centralized, they are regulated aswel and their value is backed by some reserves e.g the number of coins in circulation is backed by real US Dollar.
Lets say you bought you bitcoins or ethereum and the price has been going up and its now running out of steam and you want to sell of your position and maybe re-enter later. If you sell Bitcoins and maybe lets say you buy Lite coin, will that solve anything?
Nothing is solved but instead it a recipe for disaster because that coin is a non stable coin aswel so it will lose its value because mostly when the crypto market starts falling the whole market will bleed, but since Stable coins are not volatile when you sell-off your Bitcoins you buy stable coins e.g Tether then you hold your money in Tether and the value will remain the same it wont change. That is the advantage of stable coins, i hope this will be helpful to those who did not know the main difference on these two types.
