Cryptocurrencies | BTC vs. USDT As Quote Currency
Ah, the million-dollar question: should you opt for stablecoins like USDT or go for the more volatile options like BTC when choosing your quote currency in the crypto world?
If you're new to trading, especially on platforms like Cryptohopper , this question might feel like a riddle wrapped in an enigma.
Don't sweat it. By the end of this guide, you'll not only understand the advantages and disadvantages of each but also know how to pick the right quote currency for your specific needs.
Now, you might be wondering, "What exactly is a quote currency?
It's the currency you use to acquire assets and the one you'll receive when selling them.
Typically, it's a Fiat currency like the USD when trading stocks, but in the world of cryptocurrency, you can use one crypto to buy another.
The choice is yours – whether to embrace the stability of Fiat or dive into the exciting world of crypto-to-crypto transactions.
Why Quote Currency Matters, Especially in Crypto
In traditional markets—think stock, commodities, and Forex—choosing a quote currency often feels like a no-brainer.
People usually go with what they have or what's most liquid. But the game changes in crypto, where the features and quirks of each coin set them apart like night and day.
Let's cut through the noise and focus on the two prime contenders: USDT for stablecoins and BTC for the more volatile ones.
BTC - Bitcoin
Background
Bitcoin burst onto the scene in 2009, thanks to Satoshi Nakamoto.
This decentralized currency promised a world where power gets redistributed from institutions to individuals.
Sound like your kind of Utopia? Then Bitcoin, or other cryptocurrencies like BNB or Ethereum, maybe your go-to.
Pros:
Skyrocketing Potential : If you foresee a bull run, accumulating crypto by trying to increase your crypto holdings may offer the largest rewards.
Wide Range of Trading Pairs : Most altcoin pairs are available as a BTC pair. Or on a decentralized exchange as an Ethereum pair.
Predictive Power : If Bitcoin moves, others follow. This can help you predict the market more accurately and thus minimize stop-losses.
Cons:
High Volatility : BTC's price can swing wildly, making it a double-edged sword. Meaning, that even if you do not make any transactions, Bitcoin's price can still fluctuate greatly, thus having a large impact on the initial value of your investment (either positive or negative).
Bags Over Profits : When Bitcoin rises, your alt-coins may not keep up, leaving you stuck with them. This often happens at the beginning of a bull run, as Bitcoin leads the way, and altcoins struggle behind.
Challenges in Trading Low-Priced Cryptocurrencies : Engaging in active trading of low-priced cryptocurrencies like SHIB against Bitcoin can be challenging. This is attributed to the limitations in the number of satoshis that an exchange can display, which can result in a substantial spread between the bid and ask prices, often exceeding 1% in many instances.
USDT - Tether
Background
Launched in 2014, Tether (USDT) claims to be backed 1:1 by USD.
Despite controversies around its legitimacy, it's become a behemoth in the crypto world.
Alternatives for USDT are: Current fiat like USD/EUR or other stable coins such as TUSD/USDC.
Pros:
Stability : USDT offers a predictable trading environment.
Safe Haven : When the market plunges, USDT remains stable.
Cons:
Limited Trading Pairs : Less flexibility in trading options.
Corporate Control : If you're a decentralization purist, the company-managed USDT might not align with your ideology.
Making the Choice on Cryptohopper
Once you've weighed the pros and cons, hop over to the ' Base config ' section on Cryptohopper. Under ' Coins and Amounts ,' you'll find the 'Quote Currency' option. Pick the one that aligns with your goals and values, and you're good to go.
The Takeaway
Your choice of quote currency can make or break your trading journey. Whether you're swayed by Bitcoin's revolutionary ethos or Tether's stable nature, the choice is yours to make.
Ready to set your trading world on fire? Start trading on Cryptohopper today!
Click here to start trading.
