The Cryptocurrency space is obviously disrupting the financial system. Many investors and financial analysts are already considering cryptocurrencies, particularly the flagship cryptocurrency, Bitcoin, as an inflation hedge and a suitable investment product.
This has also resulted in many countries and institutions making massive investments in the cryptocurrency sector.
However, cryptocurrency volatility is a significant fear in the market. Bitcoin’s price alone fell from an all-time high of $69k to below $17k. That’s even fair compared to many other crypto assets that couldn’t survive the bear season, losing over 90% of their worth. Retail Investors are always on the receiving end of this kind of volatility, whereby many keep on recording huge liquidations of their funds due to the unstable nature of the market.
Why Stablecoin Investment?
The volatility and risk involved in cryptocurrency investment is the primary reason for stablecoin investment. Many players are now looking for more alternative ways to make money with stablecoins, and that’s very much advisable, especially in this bear market where the fear of losing one’s funds is everywhere.
Stablecoin investment is not 100% risk-free, but it’s less volatile than other cryptocurrency asset investments. We will be looking at some ways to make money with stablecoins.
Earn Interest on Loans
Here, one can use stablecoin to make investments; via a third party, a registered company will be involved.
Stablecoin holders can simply deposit their funds with these companies and allow them to invest with the funds, such as giving out loans and yielding back interest in the long run. These kinds of firms offer reasonable fund security with less risk involvement. This also helps one to share the risk involved with lending out loans to individuals or institutions.
Yield Farming
Here, you bear all the risks, unlike the earlier pattern. You will be the one in charge of your investment. This is a situation whereby you deposit your stablecoin on different liquidity pools or exchanges available in the market, considering the one with the highest annual percentage yield (APY).
Here, you will need to be a bit more careful with choosing a pool to deal with. This is because the security of different pools isn’t known, and there will be possibilities of hackers getting access to the pool, resulting in loss of funds. Hacker activities are a major issue this year as many projects have suffered from loss of funds, resulting in many companies filing for bankruptcy.
Staking
Staking is another reasonable means of investment. This involves locking out your funds to get back rewards from your stake. Staking requires patience. This is because most platforms allow just yearly and bi-yearly staking programs. The yield in this pattern is usually small, but it’s worth the time, and also it’s risk-free.
Aside from the interest that comes in from staking, users get other benefits in the system, such as governance voting rights and also, some mining benefits. Some other platforms require users to stake to achieve certain levels in the platform to unlock further benefits.
Conclusions
While the market is still moving sideways with little price movement, it’s wise to look out for other possible means of making less volatile investments, and that’s what stablecoin investment is offering.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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