USDG crypto presents one of the most enticing options to diversify your crypto portfolio that we have seen for some time. Beginner-level crypto investors usually make the mistake of risky diversification! Risky diversification happens when the investor invests all their capital in risky crypto projects hoping to maximize profits. A strategy of high risk over diversification usually backfires. Therefore, it is better to take a rational diversification approach using a perfect blend of high-potential cryptocurrencies coupled with stable coins like USDG crypto.
What is USDG and what are Stable Coins?
USDG crypto aka (Gate USD) is a USD-pegged stablecoin. It was launched by Gate.io in 2018 to serve as a stablecoin in the Gate.io ecosystem. USDG is stored on Ethereum and Gatechain. Furthermore, it is used for diversification because it is a stablecoin. The main purpose of the USDG is to provide liquidity to the ecosystem and Gate.io crypto exchange. However, it is not limited to Gate.io exchange instead users can purchase USDG on popular crypto exchanges like Binance and Coinbase.
Stablecoins are cryptocurrencies that are not highly volatile. Instead, they remain around a certain value, usually around a dollar. Stablecoins like USDG are used for storing value for investing, staking, or for liquidity. To understand USDG stable coin, you have to understand Gate.io, the exchange behind USDG. So, let’s dive straight into it.
What You should know about Gate.io: The Crypto Exchange behind USDG
Gate.io was launched in 2013 and it is considered one of the top ten crypto exchanges in the world. The exchange provides various services like spot trading, leveraged trading, leveraged ETF, futures trading, quantitative trading, hold-to-earn interest, secured loan, and liquidity mining.
Furthermore, the exchange has more than ten million worldwide users. These users generate a trading volume of over $12 billion daily in over 1400 currencies. On top of that, Gate.io has a thriving ecosystem. The ecosystem consists of USDG coin, Gate token, Gate Labs, Gate Chain, and Gate NFT. In short, the exchange behind USDG is strong and reliable. However, the question is, why do you need to diversify your crypto portfolio? After understanding this, you can evaluate whether USDG is a good diversification option or not! So, let’s understand together why you should diversify!
Why do you need to diversify your crypto portfolio?
Lets examine the three main reasons you should diversify your crypto portfolio.
· Diversification minimizes the risk
Cryptocurrencies are a risky investment. Consequently, an investor must look for every opportunity that can be leveraged to minimize risk in their portfolio. One of the best ways to minimize risk is to diversify.
For the right diversification balance, crypto investors invest both in high-potential cryptocurrencies with a mix of stable cryptocurrencies. There are a lot of stablecoins, some of them are based on an algorithm and some are based on real dollars of fiat currency.
· Diversification through Stable Coin provides Liquidity
As a crypto investor, there is value in diversifying your crypto portfolio through stablecoin because it provides liquidity.
Let’s compare a stablecoin with Bitcoin to understand why you need liquidity. Suppose, it is a bear market and you have found a great opportunity to invest. The prices of all cryptocurrencies are usually down in the bear market. However, the stablecoins remain at the same level and provide liquidity. You can use this opportunity to grab the opportunity.
· Diversification enables you to take risk
IT has been said, “the best defense against war is ensuring peace.” Similarly, the best defense while taking risks is ensuring safety. Diversification enables investors to take risks in a more controlled manner. Investors, who allow greed or emotions to direct them tend to put too many “eggs in the same basket” thinking it will give them more results. However this method usually fails in the long term. Therefore, it is better to play it safe, with the right balance of risk through diversification.
Why USDG is the best option to diversify your crypto portfolio?
Here are the four major reasons that make USDG an extremally attractive option for diversifying your crypto portfolio.
· USDG Crypto is a Stable Coin
USDG crypto is one of the best options to diversify your crypto portfolio because it is a stablecoin.
The value of a stablecoin usually remains the same or fluctuates very little. Consequently, even in a bear market, it does not lose so much value. Hence, an investor can use these funds when an attractive new opportunity comes along. Without holding these stable coins an investor may not have the capital without liquidating their other crypto assets to get to the new opportunity. The last thaing you want to do is have to liquidate a coin that is in the middel of a downdraw.
The patient diversified investor always comes out ahead. A carful diversified trading plan is a must!
· Hold and Earn Mechanism of USDG Crypto
Additionally, USDG crypto is considered a handsome option to diversify your crypto portfolio as it enables investors to earn while keeping the investment safe! USDG Earn is the product of Gate.io. It enables investors to get a high annualized yield through the hold-and-earn mechanism. Moreover, Gate.io does not charge any extra fee for holding and earning from USDG!
This stable coin is a win win!
· Easy Trading and Liquidity
The trading and liquidity of USDG make it the perfect option to diversify your crypto portfolio. It is not always easy to instantly sell crypto currencies, especially at a certain rate. The markets keep fluctuating. However, USDG is pegged with USD.
Moreover, USDG can be instantly traded. Hence, it is one of the ideal options for diversification of the crypto portfolio with instant liquidity.
· The Backing of Crypto Exchange
Lastly, USDG is backed by one of the most reliable exchanges in the world; Gate.io. Gate.io is trusted by over 10 million users who trade an astounding $12 billion daily. Therefore, it is a strong stable coin with the backing of a strong well established exchange. This all means that it can be easily liquidated, traded, or acquired. For these reasons we recommend, USDG crypto to be a viable option for the diversification of your crypto portfolio.
In conclusion, diversification is the key to success in investing. Some people, especially beginners, diversify their portfolios with too many high risky cryptocurrency coins.
A wise approach would be to diversify your portfolio with stable coins like USDG along with the high potential coins. In this way, you can get maximum diversification, leverage great liquidity, all while minimizing risk.