Trading cryptocurrencies is a high-risk activity. But probably, most people that have gotten involved with cryptocurrency have tried trading at some point.
However, trading cryptocurrency still remains labeled as a high-risk activity, therefore you should never invest more then you afford to lose. And until you get comfortable to a cryptocurrency exchange and the way trades work, you should stick to the top 5 cryptocurrencies.
Once you’ve got the gist of it, you can start exploring. And once you start exploring you will start seeing the opportunities other cryptocurrencies come with.
And looking from a trader’s point of view, you will see there are stablecoins and exchange tokens that can help improve your trading activity considerably.
How so? Let’s see.
Dealing with Stablecoins
One of the most common arguments against cryptocurrency is high volatility. Thus stablecoins came into the picture.
In 2017-2018-2019 we’ve managed to look at bitcoin reaching new heights only to drop dramatically. Nevertheless, BTC has always been bouncing back up. And now, the crypto community is even expecting it to reach new peaks. But no matter how enthusiastic you can be about cryptos, such drops and jumps are not good for the heart. Especially when you’re playing around with big money.
Stablecoins are that breath of air, that significantly reduce the risk of volatility. They manage to do that by being backed by a less volatile asset such as fiat currencies or commodities.
Nowadays, the most used stablecoin is Tether’s USDT which pegs the USD at a 1:1 ratio. It’s widely used for being able to sustain huge amounts of liquidity.
Although USDT is the most used stablecoins in trading, Tether is surrounded by controversy regarding the company’s ability to back the amount of coins into the market.
It may not be the most well-liked crypto project, but Tether still provided a cryptocurrency which traders could use in a more reassuring way.
Trading with Exchange Tokens
Stablecoins managed to revitalize trading through reducing volatility.
But the crypto market is always evolving and coming up with new things.
Just by providing a place to traders to exchange cryptocurrency between themselves, crypto exchanges managed to make the crypto market accessible to anyone with an internet connection.
The more traders started to use cryptocurrency exchanges the more discussions about fees and service quality started to emerge.
In this regard, crypto exchanges launched the exchange native tokens that come as a tool to help traders in their activity.
The exchange tokens do not come as a cryptocurrency you buy hoping to get rich, but with the sole purpose of using it in your trades, to access exclusive features. And even better, you’re incentivized to hold and use them.
The most common perks exchanges offer with their tokens is that you get a discount on trades. But that is evolving too.
New exchanges are emerging and they offer far more for using their tokens.
Scalpex, a particular cryptocurrency exchange launched in May 2020, introduced in August 2020 their own exchange token, SXE. It is an ERC-20 token that doesn’t only offers a fee discount but also gives its holders access to the exclusive preview-version of the exchange, early access to the new experimental features and trading strategies, payment of fees and other exchange services, and many more.
Your way of trading
When deciding between stablecoins and exchange tokens you should first consult your strategy and think thoroughly your resistance to risk. You are the best to know and decide what’s most suitable for your investments. And although you may receive a recommendation or another, take everything with a grain of salt and do your own research.
If you prefer the safest environment you can get in the cryptocurrency trading world, then you should stick with stablecoins. Sometimes when you go to sleep at night, it’s best to know your investments will have the same value tomorrow they had today.
But if you’re looking to get the most advantages of the exchange platform you trade on, even if you’re exposed to volatility, then exchange tokens are for you. Being able to reduce the commission fees and access the newest futures can help you advance in your trading carrier.