Hi guys, I’m using localmonero to buy XMR and cakewallet to keep my coins. My idea is to have those XMR accessible when the time comes, for example if I want to purchase something and the seller accepts Monero. The thing is I would like to have those XMR “frozen” until the situation comes without being exposed to coin prices changes. I was thinking to keep USDT, and when I need to buy something with XMR, just convert it and use that specific amount. Maybe is not the point of Monero itself. Is this approach the best option? What would be your recommendations? Thank you!
The short answer is you can’t. Hold small amounts so fluctuations don’t bother you that much. USDT (any stablecoin for that matter) is only stable until it isn’t.
Exactly. I don’t mind holding USDT for a few days if I’m waiting to do a trade, but definitely wouldn’t hold it longterm. Too much of a risk of a black swan event in my opinion.
Buy low, sell high. Be patient.
That’s wrong. Buy high, sell low.
It is da wae
It’s the value of the USD that is fluctuating not the value of XMR :)
My advice is if you get some XMR that you actually put it in your own wallet, with your own secret key phrase that you generated using an app like cake wallet. Don’t fall for a naked short seller promising that they have crypto for you by showing you a number on a screen. If its not your keys you’re falling for a scam.
You can’t compare the USD with a crypto. A crypto is only based on offer and demand and are volatile. A fiat, it related to entire gigantic economies, governments and markets. I’m not saying one is better than the other, they are different and can’t just be compared.
It’s the value of the USD that is fluctuating not the value of XMR :)
That’s exactly my view too. Basic human rights are fundamental and invariable; a Privacy/Fiat ratio is volatile, because a fiat is volatile as privacy is sometimes valued properly, but sometimes traded cheap.
That said, you may want to simply get XMR “on-demand” just before you actually use it, so that the rate won’t change significantly.
There’s no privacy stablecoin as far as I know. You’re exposing yourself to price changes when you hold Monero, no way around it.
There was, but… I don’t know if they are still around.
Haven Protocol (XHV/xUSD)
It doesn’t look very stable to me. What am I missing? https://coinmarketcap.com/currencies/haven-protocol/
The “stablecoin” was called xUSD. You would acquire the protocol coin XHV (built on Monero code). You could transfer it to an XHV Vault. You could then exchange your XHV for any of the available stablecoins (called xAssets) in-vault. Whenever you swap back, you would get the face value of the stablecoin’s worth of XHV.
Example:
I buy, or mine, 10 XHV at a price of $1 each. I move it to my Haven Vault. In-Vault, I swap 10 XHV for 10 xUSD.
Now, the price of XHV drops by half. When I swap back, I still get $10 worth of XHV (now 20 coins). The xUSD will always be worth $1 worth of the underlying coin, regardless of the price of XHV.
All of these transactions are hidden. The devs originally marketed it as a crypto offshore bank.
What happened the other way if XHV went up in value? You’d only get 5 back? Interesting idea.
Correct.
In my opinion it was an awesome idea. The price of XHV tanked after the last bubble, and too often were there major changes inside the ecosystem. It was an internal crypto safe-haven.
You’re asking for advice on how to hedge your investments, with the constraint that you want to maintain liquidity in the crypto space so you don’t have to convert from Fiat to crypto.
Full disclosure, I do not do any of this, I don’t hedge crypto. The common advice you’ll see is to hold a basket of stable coins. Each stable coin has its own underlying risk, because the company providing the stability is exposed to the same market forces that the other coins are.
I think hedging crypto with crypto is hard. Your entire portfolio should include assets outside of crypto, and those should be your hedge against crypto volatility.
Depending on how sophisticated you want to get, you could create a hedge using a future contract against your volatile asset. But then you introduce counter party risk, I believe binance offers monero futures… but it’s binance… who are going though some drama right now
https://www.investopedia.com/ask/answers/06/futureshedge.asp
Monero hasn’t fluctuated too much in the past few years. Seems to be staying around $150ish.
You can try to mitigate the downside risk by moving to a stablecoin (like USDT, USDC, DAI, etc.), however that means you also don’t have exposure to the upside gain if the price goes up.
Also, stablecoins have their own set of risks. Unlike Monero, more stablecoins can be created out of thin air. If something crazy happens (like we learn that stablecoin creators don’t have the reserves that they claim that they do), stablecoins can drop in price as well.
Ultimately, you probably want to hold the value in whatever you think is the most trustworthy. If you trust stablecoins (and aren’t concerned about black swan events), that’s not a bad place. You could also keep it in Bitcoin, seeing as it has the largest marketcap (and more can’t be minted out of thin air), but this can still have price fluctuations. Personally, I’m not too concerned about Monero’s price dropping so I’m happy keeping it in Monero.
If it’s a large amount of money, you could even consider splitting it into thirds and putting 1/3rd in each. That way your risk is even more distributed. I wouldn’t mess with this though unless the amount of money is over at least a few thousand dollars.
