Given the extreme volatility of the crypto market, every trader is looking for a protection to consolidate their profit.
The first two possibilities you have are the transformation of profit into fiat or carry out transfers.
But is there a less expensive option (in some cases the fees are quite high) but equally effective?
Well it is possible through the stable coins.
A stable coin is nothing more than a digital currency that has a ratio of 1: 1 to a fiat currency.
One of the most famous is Tether (USDT) which has a value of 1 dollar.
USDT cannot be mined like BTC and does not have a limited supply: according to the founders this is possible thanks to the fact that USDT is protected by real assets.
This assertion by the founders does not have a verifiable confirmation from third parties, as the founders themselves, for reasons of trade secret, did not pass the audits.
Furthermore, the site specifies that USDT is not money and does not have a real price (in fact, if it is linked to the dollar it cannot have its own market price ...).
The icing on the cake, the company does not have to guarantee neither the value nor the security of the token. (madness!)
As if that were not enough, the company has no obligation to return USDT to users and reserves the right to refuse the service.
In practice, if the company goes bankrupt, no one will return the funds to users.
Although these claims are indelible written on the site, the founders ensure that the security of the "coin" is verified and periodically publish reports.
In addition to what has been said up to here, another complaint that is made by sector experts to Tether is its centralization: leaving out its similarity to the fiat currency it is supported, with this centralization there could be an uncontrolled issuance of token.
But is Tether really scary?
Despite all the skepticism surrounding this stable-coin, the market share from 2017 to 2020 exceeded 70%; this is an indication of the market demand for this asset.
Let's assume that USDT does not have collateral, would it really be so catastrophic if it collapsed dramatically?
I ask you a question: do Euro, Dollar, Ruble have a collateral? No!
Or rather, theoretically they should be guaranteed by foreign exchange reserves, but due to the political situation, no checks have been made to certify their actual hedging (a bit like Tether ...) but there is absolutely no mention of a collapse .
If this were to happen, it would certainly not be due to the lack of collateral, but due to an indiscriminate press which would cause an impressive devaluation.
In essence, more than a collateral, the solidity of a currency is made by public consensus: who is concerned today with verifying whether the gold reserves cover the supply of Euros or Dollars in circulation? Nobody.
Whatever happens, it will happen like Venezuela, but trust me, it won't happen. Never.
If we then consider that many investors have shown a certain interest in Tether, we can sleep peacefully that it will not collapse: I have never met an investor, mostly institutional, who would stake their money in a high-risk asset.
The password is diversification: every good trader knows that to maximize profits, you need a varied and carefully studied basket; so it's okay to use USDT to materialize your profits, but if, anyway, we leave or turn those profits into BTC, we will surely make a wise choice: we could start our PACC.
How do you differentiate your trading income?
Have a look at this video to understand how we are differentiating our incomes