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!
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