Normie_buys_crypto (OP)
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January 08, 2022, 05:11:00 PM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
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JohnBitCo
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January 08, 2022, 05:29:52 PM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
If you are a trader, you would buy and sell many times. So it will not be suitable that every time you sell your crypto, you withdraw it straight into your bank. Then again if you want to trade, you will again convert fiat to crypto and incur all these extra costs. For this reason, stable coins are important.
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jrrsparkles
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January 08, 2022, 05:35:24 PM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
Holding stable coins doesn't make any sense to me as well, but most people are using it as a coin to keep the profits because everytime you withdraw from exchange or converting into fiat will cost you lot of fee and when you want to buy again crypto with fiat then also you have to oay kore fee and it may take even a week for your deposit to be transferred from bank to exchange in that time you will actually miss the price you wanted to buy.
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iv4n
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January 08, 2022, 05:42:30 PM |
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I use them to get in and out from some trades! It's good to keep the value when the market is going down as well! Sometimes I gamble with them, they make it simple when you follow your bankroll! All in all stable coins are alright for use, it's the same as using any currency! Who holds stable coins there's better for a reason, to buy some dip, if not that I don't see any other purpose of holding them for a longer period!
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Normie_buys_crypto (OP)
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January 08, 2022, 06:06:46 PM |
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I maintain a balance of fiat in the centralized exchange as a parking area or reserve to conduct a trade, so I'm not sure what benefit a stable coin could provide over using fiat. Conducting a trade using stable coin pairs is not free--the exchange will still charge fees to conduct a trade in a stable coin, just as it does to conduct the trade in fiat. So I don't see the benefit or purpose of using stable coins, at least for trading.
Furthermore, the vast majority of stable coins seem to be ETH-20 based, so if you want to withdraw from the exchange or move to a different exchange, wow that is going to be expensive!
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timerland
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January 08, 2022, 07:18:03 PM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
It's definitely a big concern if you are holding stables long term. There is always that additional risk that you'll see your holdings fluctuate depending on the pegging mechanism of each stablecoin. However, in the short run it is generally safe to hold stablecoins and it is way easier to trade with when you need to dump your holdings for fiat quick. It's hard to get bank funds back into crypto also.
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Kavelj22
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January 08, 2022, 08:12:56 PM |
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I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Does there anybody already doing this? From what i can tell, people already using stable coins for three main reasons: 1) As a trading pair like BTC and ETH with the exception that it's not fluctuated. 2) As an instrument for trading, freezing balances to avoid big loss when the price of such a crypto dropped. 3) Using it in the same way we use FIAT money to make daily small trades outside of exchanges.
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Kyraishi
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January 08, 2022, 09:11:20 PM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
It's just way easier to day trade with Stablecoins. You don't want to wait 2-3 days to make your moves because you've withdrawn the funds into a bank account and now have to wait for funds to clear back and forth. The crypto markets simply move too fast for that. As to your concerns with custody, just don't use non 1:1 backed tokens like USDT which employ fractional reserve. USDC/DAI etc. should all be fairly safe to use.
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AmoreJaz
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January 08, 2022, 09:22:42 PM |
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I maintain a balance of fiat in the centralized exchange as a parking area or reserve to conduct a trade, so I'm not sure what benefit a stable coin could provide over using fiat. Conducting a trade using stable coin pairs is not free--the exchange will still charge fees to conduct a trade in a stable coin, just as it does to conduct the trade in fiat. So I don't see the benefit or purpose of using stable coins, at least for trading.
Furthermore, the vast majority of stable coins seem to be ETH-20 based, so if you want to withdraw from the exchange or move to a different exchange, wow that is going to be expensive!
actually, you are not alone about your worry of holding stablecoin for long period of time. i guess some of the users here also have that kind of instinct that most of these stablecoins are not saying the absolute truth regarding their usd assets backing their stablecoin. as we remember, in 2019, usdt admitted they were not fully backed by usd assets, so right now, do you think they are indeed 100% backed by assets? so one mistake, and we will see these stablecoins going down. but for day to day trading, it may help the trader and using the usdt (trc20) has still the cheapest fee among them. so you can use the trc20 network instead of erc20, that is, if it is available in the exchange.
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WalkerIVIV
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January 09, 2022, 12:49:01 AM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away. It's caused by some of people prefer to hodl stable coin instead of cashing their money to their bank account and if you're active trader and you will know what's the purpose of doing this. It's to anticipate the dump that can occur anytime and the traders can buy more token when the price goes lower again. If you're feeling worry and just withdraw your money to your bank account and others may have other opinion. I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing? You're not missing it but remember that so many people are also become active traders and when they are believing in the stable coin and what's wrong? Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
so what's the different with doing daily trade? if you're feeling worry and then just don't use it. that's already fix your problem.
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noorman0
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January 09, 2022, 01:03:38 AM |
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The fiat><crypto pair is only available on exchanges that handle withdrawals to local banks. Not everyone wants to trade on their local exchange for a number of reasons. Also, process efficiency needs to be considered when you are actively trading.
Doubts about the reserve value of some stable coins have existed for a long time, but for now there is no other choice but to use them. That's why you shouldn't keep stable coins for too long.
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Rruchi man
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January 09, 2022, 03:30:25 AM |
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I use them to get in and out from some trades!
Similar use to me, stable coins offer some sort of assurance against the market. When the market starts to dip, USDT's and BUSD's can help secure your investment until the market gets good for you to join back in. Also If you have no intention of trading, but Just want to avoid the over use of the centralised government financial system, Stable coins are a good switch as since their values are hinged to the dollar, they can be considered as a sort of "decentralised digital dollar".
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Maus0728
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January 09, 2022, 03:40:39 AM |
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I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
It is not about USDT or other mainstream stablecoins becoming unpegged, but about the possibility of locking or freezing your stablecoin assets in your exchange wallet due to the fact that these coins are heavily regulated or simply "centralized." Asset freezeIn order to remain compliant with regulators, many stablecoin issuers have introduced blacklists so that they can freeze the stablecoins held at specific addresses. This ability is also particular useful in the case of hacks, but it means that the trust we must place in the issuer to not act maliciously is that much greater. Source I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Holding stablecoins is fine; in fact, you will most likely use them, particularly if you are actively trading on an exchange. However, it is not recommended to hold for an extended period of time for a variety of reasons related to an asset controlled by a third party. And keep in mind that an asset controlled by a third party is very similar to not holding your cryptocurrency wallet's keys/seedphrase. Recommended read: [UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets
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michellee
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January 09, 2022, 04:56:28 AM |
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I keep it in stable coins because when the price is down, I can buy back using stable coins and besides that, stable coins do not have much volatility like other cryptos. You should not worry because most exchanges have those stable coins and you can also send the stable coins in your hardware wallet such as Ledger Nano to buy back the altcoin or bitcoin from your wallet.
If you think that is too risky for you, you should search for other ways to reduce the risk. We sell bitcoin or altcoin in stable coins at the top price and wait for a while until the correction comes so we can buy back at a lower price. As long as you can buy at the lowest price, you should be okay and not worry about the price.
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adaseb
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January 09, 2022, 04:57:09 AM |
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The reason why stable coins like Tether became so big is because most people got 2 exchanges typically. First is a fiat on-off ramp exchange, usually like Coinbase. And another is generally an altcoin crypto exchange like Binanace.
People would deposit fiat, convert it to tether and that tether they can send to an exchange like KuCoin or Binance and trade tons of alts and they don't need to worry about any wiring details to those exchanges. Make it much easier to trade alt coins pretty much.
Another reason is for people who want to sell bitcoin or alts when they go up and leave it in tether on cold storage and buy it back when it goes back down cheaper. This way they don't do too many transfers back and forth between their exchange and bank.
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TheUltraElite
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January 09, 2022, 05:05:58 AM |
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I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away. There are lot of concerns in cryptocurrency. Bitcoin being outlawed by some countries, yours could be next. But if you live in that worry you will never be able to take the services of tools available at your disposal to maximize your profits. Stablecoin is one such tool. I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing? In a Bull market, you sell your bitcoins to buy USDT at that high price on the bull market. Now you just hold the stablecoin till the market drops again. Now you spend the stablecoin to buy Bitcoin back at the lower price. If you do the math, you can understand that you actually multiplied the amount of bitcoin that you own since the first trade. Nobody keeps stablecoins as a source of value, at least not someone who is diligent enough to understand this. They are an intermediary source to hedge your assets, IMO. Try to apply this to the markets everyday, try on paper first - you might get the hang of it.
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shinratensei_
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January 09, 2022, 06:36:57 AM |
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Hi, I'm a normie who finally got into crypto in nov 2021. Glad to see you joined in crypto But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? So many people are using this but converting whole of your stable coin to your back and then that will be very complicated once you need fast fund to buy back again. I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
So many people are seeing this as the main concern when it comes to the stable coin but why do they still use it even when they are feeling worry about this? I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value;
Rather than store of value and i would like to call them to use their stable coin as reserved funds. They have their own store of value but again. Reserved fund is a better word rather than store of value in case of stable coin. to me this feels way too risky. What am I missing? Yeah for you but not for others. Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
Have you read or at least know what's the main purpose of stable tokens that exist in the market right now? If you have not yet read about that and then you can read more about that on internet.
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barabeku
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umachit.fund
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January 09, 2022, 06:51:59 AM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
I can see using stable coins as a trading pair to purchase alts on a dex but I don't understand holding stable coins for longer periods of time like weeks, months or years as a store of value; to me this feels way too risky. What am I missing?
Might be different if you could do a lot of your every-day normal shopping with stable coins but right now you can't.
Actually, withdrawing money from crypto wallet takes too much time and big commissions what is more, you will need to buy more crypto when there is a dip so personally I prefer leave my money in stable coins and wait for a moment to buy more cryptocurrency that I really believe in. So as not to be so subjected to risks, you can just use different stable coins it means to diversify your money between USDT,USDC, DAI etc.
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bestcoins1
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January 09, 2022, 06:58:40 AM |
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Actually, withdrawing money from crypto wallet takes too much time and big commissions what is more, you will need to buy more crypto when there is a dip so personally I prefer leave my money in stable coins and wait for a moment to buy more cryptocurrency that I really believe in. So as not to be so subjected to risks, you can just use different stable coins it means to diversify your money between USDT,USDC, DAI etc.
Withdrawing money from cryptocurrency wallets now no longer requires expensive fees, mate, because the choices are already very many and it's also the same as choosing a stablecoin that also has many types, so it's very varied in choosing the most appropriate one.
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tyz
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January 09, 2022, 09:20:02 AM |
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Hi, I'm a normie who finally got into crypto in nov 2021. But I don't get stable coins. When you sell your crypto, why don't you just convert back to fiat and put that fiat into your bank account right away? I worry about stable coins becoming un-pegged; this is a big concern for me; it's an extra worry that you don't have if you just convert back to fiat right away.
Welcome and good question! As for stablecoins, I have the same concerns as you. I even see many as a scam, especially USDT. Still, I use stablecoins every now and then for short term trades, especially with coins that don't directly have a USD and/or BTC trading pair somewhere. This is especially true for coins that are only tradable via a decentral exchange and therefore many such coins are only tradable against a stablecoin. But I would never hold stablecoins long term, but only short term as an intermediary asset for the trade of e.g. a small coin into USDT and from there directly into Bitcoin or USD.
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