How to earn more crypto during the market decline using the USDQ stablecoin at BTCNEXT?
In this article, we want to show you the best way to earn money even during the crypto market correction/decline. We will teach you how to use our stable coins USDQ, KRWQ, and JPYQ on the BTCNEXT exchange to safe and earn more cryptocurrencies!
What are the stable coins and USDQ in particular?
Stable coins are cryptocurrencies that run on a blockchain, however, their prices are pegged to the fiat currency. There are some minor price fluctuations (usually not more than 1%). This is achieved by some sophisticated trading algorithms and sufficient reserves. Thus USDQ keeps the reserves in cryptocurrencies. The reserves to emission ratio are 2:1. If the investment accounting is done in fiat currency, then the stable coins are the most stable and fixed value assets.
How you can use the stablecoins on BTCNEXT exchange?
The prices of Bitcoin and other cryptocurrencies can be highly volatile. Sometimes they go up, sometimes they go down. How can one get profit every time the price moves up or down?
- Hedging against price corrections for other crypto assets. For example, selling some bitcoins during price fall may allow buying bitcoins at lower prices. Some real case calculations. About 2 weeks ago the bitcoin price was hovering at around $10K mark. If one investor with 1 bitcoin knew that the price will go down. Then he/she could have sold this one bitcoin and received 10K USDQ. These days this investor could have purchased about 1.25 BTC at a price of about $8K, which makes it a 25% profit.
- Storing the value and easy transfer. It is easy to plan an asset accumulation, storage and transferring in stablecoins since the price for a stable coin is fixed. Paying someone a certain amount of funds is very easy in stablecoins. Everyone would be fully confident in the valuation of a portfolio if it consists of stablecoins.
- Crypto portfolio risk management. Keeping a portfolio with a balanced distribution between Bitcoin, altcoins, and stablecoins is a good way to manage the possible market risks.
Trading the BTC/USDQ pair is very easy on BTCNEXT. Just select the USDQ Market and then the BTC/USDQ pair for trading.
Some insights on Bitcoin hedging using the USDQ.
Let us also demonstrate you the current global market overview of the Bitcoin price movement:
There are two trend lines which are based on mathematical modelling for the last 10 years.
One is the simple trend line (the blue line in the chart above) and another is the wave-like trend line (the green line).
The formula for the blue line is the following:
The formula for the green line is the following:
Where t — the number of days since 03/01/2009 — the Bitcoin Genesis block date.
The current chart shows that earlier this year bitcoin price jumped from the green line to the blue line too prematurely. Currently, it is bouncing back from the blue line to the green line again. When the price is going down it is a good idea to sell some crypto for the stablecoins. When the price is going up — it is better to use the accumulated stablecoins and purchase more crypto assets. The chart shows that the prices make a correction from the blue line down to the green line. We are currently at a strong support level of about $8K. Another strong support level is at about $6K. In case that you think the price may follow down to $6K, it could be wise to sell some BTC for USDQ and wait a few weeks to repurchase the BTC at levels, close to the green line.
Of course, the price for crypto assets can be highly volatile and nobody can predict the next price movement. The stable coins are designed to save the value of the investment during periods of market decline. This is not financial advice — this is a simple explanation on how to use the stablecoins in different situations. Please make your own conclusions and decisions responsibly.
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Head of Department of Education