When it comes to investing in cryptocurrency assets, it is important to pay attention to Risk Aversion because it can be very beneficial. It is not always a good idea to take risks all the time when investing in any assets, especially cryptocurrency assets, sometimes it is better to just be play safe than taking risks and regretting later.
When we talk of risk aversion, it simply means the act of reducing risk. Simply put, risk aversion when an Investor or trader follows the safest option possible to reduce as much risk as possible and accepts minimal profits, rather than taking risks to make big gains. There are different methods of risk aversion and one of the common risk aversion methods is savings.
When it comes to investing in any crypto asset, conservative or low-risk investment is simply when an investor prefers to allow his/her cryptocurrency asset investment to grow slowly and steadily over a period of time. For me as an investor, it is much better for me to preserve my investment and ensure that chances of loss is reduced to the bare minimum, than aiming for big profits and risk losing it all due to the high volatility cryptocurrency prices.
As a conservative investor, I like to put my investment in savings using stable coins like BUSD or USDT. The reason why I focus on savings is because savings allows me to earn interest over a duration of time while still preserving my principal investment. I use stable coins because stable coins retains its value and are not volatile.
The disadvantage of saving with stable coins is that they do not appreciate in value. For instance, when you invest $200 worth of BUSD or USDT, you will always have your $200 + the interest. For me, this is important because it means that there is a very low possibility of loss.
To set up either fixed savings or flexible savings, you will need to go to the official Binance website and login. Both fixed and flexible savings are located on the same page so it is easy to navigate.
To set up fixed savings, go to finance on the top of the page and choose Binance earn. Click on it and you will find the fixed terms section. Select fixed saving and pick from any of the cryptocurrency assets to deposit. At the moment, Binance fixed savings only allows USDT and BUSD.
Both have similar APY. Choose your preferred asset and click on transfer. On the transfer page, you can choose the duration. For me, I like 90days durations because it has the most interest rate. Enter amount, accept the terms and confirm transfer. That is it, you can now begin to earn interests on your locked up funds
To set up flexible savings, go to finance on the top of the page and choose Binance earn. On the Binance earn page, you will find the flexible terms section. Select flexible savings and choose your preferred cryptocurrency asset you want to deposit by clicking on more.
At the moment, there are different cryptocurrencies to choose from, however, it is important to know that they all have different APY and interest rates. For this example, I choose cardano ADA. Once you are done entering the amount, accept the terms and confirm transfer.