How to start preserving wealth with crypto: An easy guide to stablecoins and Bitcoin

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In Brief

If you are and if your answer is yes, then stablecoins and Bitcoin may be two tools you can use to protect your wealth and start building a successful investment portfolio.

Despite these risks, there is still a lot of potential for profit to be made in the cryptocurrency market.


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Stablecoins and Bitcoin are two powerful tools for preserving your wealth in today’s turbulent financial markets. 

Bitcoin

With stablecoins, you can invest in a wide range of assets without exposing yourself to the volatility that is usually associated with cryptocurrencies. And with Bitcoin, you can take advantage of this innovative new technology to maximize your returns while minimizing your risks.

Have you heard about the financial benefits cryptocurrency bestows on its investors? If yes, are you interested in joining the fray to take advantage of these huge earnings and beat inflation, something your existing saving options are failing to do?

 If you are, and if your answer is yes, then stablecoins and Bitcoin may be two tools you can use to protect your wealth and start building a successful investment portfolio.

Extreme volatility has been endured by the coin during its journey. Along with steep walks, there have also been acute falls. Bitcoin experienced a wild session in May 2021, dropping 30% to close to $30,000. The decline was greater than 50% when compared to the record high of $64,829 reached in mid-April.

Stablecoins, on the other hand, provide an excellent alternative to traditional investment vehicles. Unlike cryptocurrencies like Bitcoin or Ethereum, which are prone to high price volatility, stablecoins are pegged to more stable assets, such as gold or the US dollar. This makes them much safer and less risky investments than many of today’s most popular cryptocurrencies.

Bitcoin as a means of preserving wealth

Bitcoin can be used in two different ways to preserve wealth: as a reliable money reserve and to help halt inflation. You can use Bitcoin to conserve your wealth and funds due to its limited quantity and decentralization. Unlike traditional currencies, Bitcoin is not controlled or issued by any central banking authority.

As a result, its value cannot be manipulated or inflated in the same way that fiat currencies can. Additionally, because Bitcoin’s supply is limited, it provides an effective hedge against inflation and helps ensure that your hard-earned wealth does not depreciate over time.

Investing in crypto: Understanding stablecoins

Stablecoin is of two types, fiat and crypto. Fiat stablecoins are pegged to the US dollar or other government-backed currencies in order to maintain a steady value. Examples of these types of stablecoins include Tether (USDT) and TrueUSD (TUSD).

Crypto-based stablecoins, on the other hand, use advanced algorithms that help maintain stability by using collateral and market mechanisms. These types of stablecoins include DAI and MakerDAO, which are both very popular in the cryptocurrency community.

How to purchase and keep stablecoins when investing in cryptocurrencies

stablecoin

You need to have an account with a digital wallet or a cryptocurrency exchange in order to purchase stablecoins. Some popular exchanges that offer stablecoin trading include Binance, Coinbase Pro, Kraken, and Bitfinex.

Once you have an account with one of these exchanges, you can start looking for the right stablecoins to purchase. This will vary depending on which type of stablecoin you are interested in and what kinds of features you need.

For example, if you are looking for a crypto-based stablecoin with high levels of liquidity and stability, then DAI may be the right choice for you. Alternatively, if you are more interested in maintaining price stability and want to keep your funds within the US dollar system, then Tether or TrueUSD would likely be better options.

Regardless of which stablecoins you choose to invest in, it is important to keep your funds secure at all times. This means using strong passwords, enabling two-factor authentication, and keeping the bulk of your funds in cold storage rather than on an exchange or digital wallet.

Additionally, you should always do your own research before making any investments and be aware of potential scams and fraudulent activity in the crypto world. By following these tips, you can safely and confidently start preserving your wealth with stablecoins and Bitcoin today.

Risks associated with trading in cryptocurrency

Like any investment avenue, cryptocurrency trading has some risks:

Price volatility: The value of Bitcoin and other cryptocurrencies can swing wildly from day to day, making it a risky investment.

Lack of regulation: Cryptocurrency is not currently regulated by any government body, which means there is no guarantee that your investment will be protected.

Scams and fraud: As with any new technology, there are always those who try to take advantage of unsuspecting investors. Be sure to do your own research before investing in any cryptocurrency, and be aware of the many scams that exist in this space.

Despite these risks, there is still a lot of potential for profit to be made in the cryptocurrency market. By understanding the inherent risks and taking steps to protect yourself, you can safely enter into this exciting new world of trading.

Conclusion

Both Bitcoin and stablecoins offer benefits that fiat currencies don’t. Whether you are looking to safeguard your savings from inflation or simply want to build a profitable investment portfolio, stablecoins and Bitcoin offer unique benefits that cannot be found with any other financial tools. So if you are ready to start exploring the world of crypto investing, then be sure to learn more about these powerful tools and start investing.

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Disclaimer

Any data, text, or other content on this page is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results.

Ken Gitonga

Ken Gitonga is passionate about writing. His work involves writing crypto articles on SEO, TAs, News writing, Web3 articles, crypto price prediction, and white paper drafting. Ken is a content writer and marketer. He has worked in the SEO and content marketing industries for over 3 years and has helped businesses grow their online presence and traffic.

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