Stablizing Your Portfolio in a Bull-run

in HODL28 days ago

The everything bubble in crypto requires investors to be well-organized for a correction that may take place anytime. To cope with the risk of deep correction, it's always recommended to take profits from available resistance levels and while increasing the number of coins, the investors are also suggested to follow a ratio for stable coins in their portfolio.

While the ratio of stable coin may exceed the 60-40 rule for some people, the other may reach up to 90-10 in scenarios that the investors follow a stable coin rule. Also, we know people who enjoy going fully into cryptocurrencies. As these investment plans are dynamic according to the market sentiments, the bull-run usually necessitates having a decent amount of stable assets.

From my perspective, the more we test All-Time-High levels, the more percentage can be allocated for stable coins. As my initial aim is not to lose my purchasing power, I rely more on stable coins because of the unforeseeable future of the other fiat currencies.

Let's examine from a bigger perspective, in an era that the USD is printed at a massive pace, the other fiat currencies start having real issues to cope with the changing macro-dynamics. As a crypto investor, it's too hard for me to deal with the unstable dynamics of the fiat money that I'm paid and the volatility of the crypto market at the same time.

In a bull run, we are likely to assume that the trend will go up for a couple of months yet it's not a valid case for each time. Thus, I feel the necessity of growing my stable portfolio while we go up by testing new ATHs or reaching resistance levels for several altcoins.

Pros and Cons hand in hand

Sadly though, I'm missing some opportunities when the cryptocurrencies skyrocket once again. However, as I also try to create new income sources through stable coins, I can cope with the sadness to some extent 😌 By providing liquidity or earning interest on stable coins, I try to follow the motto that let your money work for you as much as possible.

On the other side, I'm not buying risk by increasing the portion of stable coins bag. When I'm in profit, it's a must to take profit at certain price levels. Otherwise, it does not matter whether you bought the coin from the dip or top as you have it in form of the coin as earlier. Buying less risk and turning into stable coins make me feel safer in the crypto ocean. As you know, red days are severe in this ecosystem 💁‍♂️

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Fight against your crypto-soul

I always go through this feeling whenever I add some more stable coins by taking profits. Though we are nearly certain that the tyranny of fiat money is no longer sustainable, the paradigm shift will be in favor of every single coin.

While being aware of this fact, risk management becomes more crucial. While trying to manage the risk that I take in crypto, I'm passing through the way of growing a stable coin portfolio.

Until a Satisfactory Correction

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No need to create FUD but it can be better to be well-prepared for both situations. If we keep going up with green candles, your bag needs to be heavy enough to make decent gains. In the case of red days, stable coins are here to keep you inside the game.

The growth of the market is amazing and we, I believe, could make gains until now. With a slowly growing stable coins portfolio, you can have another card to play in some temporary bearish days. Besides, any kind of trend shift may not hurt you with the nice amount of stable coins that you have.

IF the downtrend is temporary-> stable coins to buy lower for further gains
IF the downtrend is permanent -> stable coins to catch dead cat bounces

Yet, in the case of uptrends, you are losing some unrealized profits...

The risk/reward concept works flawlessly 💁‍♂️

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That’s a well thought out view for sure! I too am starting to stabilize with some stablecoins myself. My trick is with my larger caps is to ‘little old lady out’. Meaning like 25% at a time. If you use something like Nexo, Blockfi, where I make 8-10% or now CubFinance where I have like 4.5k in a stablecoin farm making me over 120%! So stablecoins are not a bad play at all.

I've been using Nexo since 2018. Besides, I'm planning to move some stable coins to CUB Den. Btw, Binance gives additional %10+ APR for stable pairs as incentive. You claim BNB for providing liquidty. Nice one imo ^^

Thanks for your valuable comment 😌

No problem! Yeah I have a chunk in the USDT/BUSD LP farm and it is making me 122%. Loving it! I love Nexo because of the collateral factor. I have used to to leverage my money to build @hivelist, and purchase and rebuild @hivehustlers. Now I am leveraging the USD to supply my Cub farm and paying it back as I go along... then I will repeat when the original capital is paid back. I really can’t find a better investment right now... lol. Certainly not in real estate or the stock market! You only live once! Lol!

If we test below $3 in CUB price, I'll use collateral as you mentioned. Thanks for the brilliant idea ^^

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For sure. I kept most of mine in stablecoins and did get a little cub and then some BNB. But yeah, think of it like real estate, with way better liquid returns, lol.

Great outlook! We are doing the same as @thelogicaldude said! Reposting to our account and it will show on https://coin-logic.com !

Shame on me that I do not know about the website. I'll be following from now on!

Thank you for your comment dear ^^