Cryptocurrencies are taking over the market. Research shows that around 7 million people use them around the world and it is likely that the number will double in the next 2-3 years. After all, they are superior to regular payment methods as they provide users with a greater security level, instant online transactions, low fees, and most importantly – the chance to make a profit.
Highly volatile cryptocurrencies are often used for trading and making a profit due to the fact that their price can skyrocket. Take a look at Bitcoin. In the past 1 year, it has managed to go from less than $10,000 to over $50,000. But, just as it can rise, it can also drop down in value. So, with that thought in mind, we decided to provide you with a few guidelines on how to deal with the high volatility rate.
The Most Popular Highly Volatile Cryptocurrency
Before you can deal with the volatility rate, you must be familiar with the cryptocurrencies that actually have it. All of us know that the most dominant and most popular highly volatile cryptocurrency is Bitcoin, but are there any other?
The answer is yes. Some of those that deserve a mention are Ethereum, Zenon, and Compound. The value of each of these digital assets is subject to frequent changes.
Now, let’s see how can you battle the high volatility rate.
Use The Services of Advanced Trading Sites
This may sound surprising, but trading sites can help you maximize your profits. Of course, you need to register and verify your account, but once you do that, you will be able to use their services to increase your chances of making a profit.
Platforms such as the Bitcoin Profit app have advanced automated systems that are actually able to track the latest market developments and use the data to make accurate predictions on the future price of your chosen cryptocurrency. Now, it is worth noting that they are not 100% precise and they cannot guarantee you a profit, but they are the next best thing.
Be Patient and Follow the Patterns
When it comes to investing in highly volatile cryptocurrencies, patience and rational thinking is the key to success. You cannot allow emotions to cloud your judgement. Rushing things often comes when you are dealt with the so-called FOMO factor.
FOMO, or also known as Fear of Missing Out, appears when a fake golden opportunity comes up your way. With highly volatile cryptocurrencies, that means that a rising trend appears and quick and irrational thinking leads you into making a big investment. After you put your money on the line, you witness the price of the cryptocurrency dropping and thus, you end up losing money.
Being patient and learning how to spot and analyze the patterns can make a huge difference.
Consider Using Stablecoins
Lastly, there is a way not to deal with highly volatile cryptocurrencies. As you may know not every digital asset is subject to frequent changes. Some cryptocurrencies are stable and are not subject to volatility at all. These cryptocurrencies are known as stable coins and the most dominant stablecoin is Tether.
Stablecoins are often tied to an outside source that allows them to maintain stability. That outside source can be another cryptocurrency, gold, silver, or any other precious metals, and FIAT currencies. In Tether’s case, that involves a FIAT currency, which is the US dollar.
The idea behind these outside assets is simple – for every unit of the cryptocurrency, there is an asset in reserve. Tether’s value is $1 which means that the company that created this cryptocurrency back in 2014 has $1 in reserve for every digital asset that is released into the world.
