Stablecoins vs Other Cryptocurrencies? Which one should you buy and when?

June 10, 2022
|
Back to the blog

Everyone around the world has now become aware of the DeFi market to one degree or another. They have all heard about the untold amounts of profit to be made, or lost (depending on how careful you are) via buying, selling, or investing. Did you know though, that there are multiple different types of currencies and ways in which you can exchange, trade, or sell them? Keep reading to find out more.

How Value is Derived & How to Handle The Market

Cryptocurrencies like BTC and ETH have value because of the blockchain design and the utility that these tokens offer. For cryptocurrencies like these, if more people believe in the technology and the utility of the tokens, the demand goes up resulting in an increase in price. In these kinds of market situations it pays off to own these volatile tokens; but what happens when the BTC price skyrockets making you want to sell some of it for profit, and because you believe that the market will soon crash? Or what happens when markets have already crashed and are expected to trade sideways for months? 

How to Handle These Market Fluctuations

One option is that you sell your volatile crypto on an exchange and the exchange gives you USD in exchange directly into your bank account. The market will probably take a few days to settle after that. From there, when the crash is over and you want to buy BTC again, you will have to transfer USD from your bank back into the crypto exchange which will take another few days. Some banks even charge fees to transact in and out of a crypto exchange, which will reduce your overall earnings. 

The other option is to convert your volatile crypto to a Stablecoin which is pegged to USD but is still on the blockchain. This is near instantaneous and if you want to buy BTC again, you can do so instantaneously (within seconds unlike the days in the previous case). In addition to that, your stablecoin can earn yield while you simply wait for the market to sort itself out. Thus when markets are uncertain about the future growth of a traditional crypto coin, they flee to stablecoins to protect their profits and continue to earn yield. Once the market is back and in a growth mode again, you can switch your stablecoins back into volatile crypto coins or simply continue to hold stablecoins and earn a stable yield. 

Closing Thoughts

Regardless of which coin you choose to invest in, rest assured that despite the risks with almost all of them, you can find solace in the rewards to be had through stablecoins and Coinchange. If investments are managed correctly, the rewards more than makeup for the risk. It’s why at Coinchange we like to educate our audience and offer them the most secure way to invest in crypto and earn yield no matter what the market value of the coins or tokens. We offer incentives for joining our platform, and as stated previously, regardless of the state of the market, your earnings will be in a positive yield.

See all posts

Back to the blog

Get started now

Start earning risk-adjusted annual yield return through DeFi
Create Your coinchange Account
Using our  mobile  or web apps
(iOS, Android)
Have it
Verified
We'll do that for you, just follow the easy steps once you've signed up
Make
a Deposit
Deposit your digital assets
and start earning yield