How to make money trading stablecoins
Stablecoins are designed to hold the value of a physical asset. They don’t have to be as volatile as Bitcoin or other cryptocurrencies. Thus, investors can use them to transfer value by taking advantage of the blockchain.
However, some investors may want to make money trading stablecoins. While this may not seem viable at first, it actually is. In this post, we’ll show you how to do it.
The easiest way to make money trading stablecoins is to hold them. Take a platform like Gold Exchange, for example. If you invest in their precious metal backed stablecoins, you are essentially holding gold. The value of the coins will fluctuate depending on the price of the physical metal. If you buy low and sell high, you can make a profit.
However, this does not work for assets like Tether, which are pegged to the fiat US dollar. This does not mean an increase or decrease in value, so stablecoins backed by precious metals are more profitable.
Stablecoin betting is a great way to make money. Basically, staking is blocking your stablecoins in order to receive interest on them, similar to keeping money in a savings account. This is of course a newer concept, but most traders want to take advantage of it.
In addition to this, investors can lend their borrowed funds to others. This allows you to bet even more. They will receive both the traditional interest received for the placement of funds and the interest paid by borrowers. Stablecoins are a great incentive to lend and borrow as they are denominated in fiat currency. Users can borrow stablecoins instead of traditional fiat money. They also don’t have to go through a bank or other third party.
Given that there are so many exchanges out there, it takes all of them time to accurately update the price. Some traders who pay attention can profit from this.
You can buy stablecoins on one exchange, find a higher price on another platform, and then sell them there. Assuming you sell them in time for the latest updates, you should be making a profit. Traders appreciate this as a quick and easy way to make a profit.
Depending on the stablecoin you invest in, you can make money on daily trading. Investing in an asset that is associated with something more volatile, like platinum, can get you back.
Consider the fact that you don’t pay a bunch of additional commissions like you would with traditional trading. Sure, buying and selling stablecoins costs some trading fees, but they are far from traditional rates. If you buy a volatile stablecoin at a low price, you can sell it at a high price. Day trading will make you even bigger if you have the time. Be aware that there are various stablecoins that you will not profit from. Tether and other stablecoins pegged to the USD are not volatile and will not help you profit from day trading.
Various stablecoins are built on the Ethereum platform. This network is also home to most of the largest Decentralized Finance (DeFi) projects. Many of them allow you to earn money on them by participating in stablecoins.
It’s a good idea to take the time to research the various stablecoins and determine which ones will bring you the most profit. Pay special attention to the ones on Ethereum, as these are the assets that are likely to have the most value. Of course, these are speculative projects, and the industry is new. It is possible that some of these projects could be scams, so be careful.