Re: Are stablecoins a definite solution against a bear market?
In a dreaded bear market that's lasts a long time, do you think that stablecoins are the definite solution for preserving one's investments?
So far, there has been a few stablecoins like Tether and NuBits which have gone lower than $1 at rare occasions. For investors depending on stablecoins as safe-haven assets against a bear market, this brings some disappointment. Still, stablecoins are able to retain their value against the USD most of the times. If they remain as is, then one could simply pour money into stablecoins to protect yourself against a long-lasting bear market. If prices for cryptocurrencies on the market go even lower than usual, you can even sell your stablecoins back into crypto to get more coins for your money. But this might turn to be extremely risky in a volatile crypto market.
What are your thoughts?
So far, there has been a few stablecoins like Tether and NuBits which have gone lower than $1 at rare occasions. For investors depending on stablecoins as safe-haven assets against a bear market, this brings some disappointment. Still, stablecoins are able to retain their value against the USD most of the times. If they remain as is, then one could simply pour money into stablecoins to protect yourself against a long-lasting bear market. If prices for cryptocurrencies on the market go even lower than usual, you can even sell your stablecoins back into crypto to get more coins for your money. But this might turn to be extremely risky in a volatile crypto market.
What are your thoughts?
I agree that is definitely a safe bet, but it is certainly a low-risk, low reward strategy that would only benefit you as a means to guarantee that you don't lose too much of your funds over the course of a bear market. However, to go only stablecoin will probably mean you will miss out on a lot of goods when the market recovers unless you can move your invested funds quickly. I can see why you would think this is a solid option considering the prominence of such coins, specifically Project Libra, but personally, think you are better off such enduring the bear market and staying true to the coins that are prone to market volatility, as while it might not seem like it at the time, these will ultimately pay off better in the long-run. As a middle ground, you are better of just investing in coins that are less volatile but aren't stablecoins to get the best of both worlds. You can find some great places to buy these at https://www.cryptimi.com/exchanges/altcoins-exchanges