Adrian Reid explains why you should deposit money in USDT or USD, not Bitcoin or other volatile assets. Convert to BTC or ETH only when your trading system signals a trade, then convert back. This keeps you in cash and eliminates unmanaged currency risk.
USDT (US Dollar Tether), or straight USD.
The question is, when I deposit money into my account, when I'm about to get started, what currency should I put it in so that you know it's okay? So that I lose money while I'm getting started and so on. What you've got to do is think about the currency risk. Now.
If you deposit money into your binance account and you put it all in btc, Bitcoin, what happens to the price of bitcoin?
Right. It fluctuates. Now, if Bitcoin is trending up, you'll be happy you did that. But if Bitcoin is trending down, you won't be happy you did that. But the point is, if you just put it in there, you're hoping it'll go up. If you put it in Bitcoin, you don't have a system or rules around that position. Because putting money from your currency into finance and putting it in bitcoin, that's a trade. Because the value of that will fluctuate, either help or hurt you.
And because it's a trade, if you don't have a system around it, you're going to have all of those emotional impacts that we've talked about. You're going to, what should I do? Should I sell it? Should I hold it? Is this okay? Is the train going to turn around? Is the train going to keep going? All of the uncertainty. So my preferred approach is to put the money in the account in a currency which is stable, like USD, USDT US dollar tether.
Or straight US dollars, but probably tether in finance and leave it there and trade out of that. When your system tells you to take a trade.
So that way, when you're not in a trade, when your system says you're in cash, you're actually in cash. In cash is not in bitcoin, in cash is in cash.
Make sense? So when our system is out, we want to have no risk.
But if we, if we have our, if we, if our system is out and we've got all our money in bitcoin, we've got risk a lot.
And that could sometimes help, sometimes hurt, but it's unmanaged. And unmanaged risk is going to be a problem. Yeah. So in my account it all comes back to USDT US dollar tether unless I actually have a trade on. And if I need to buy, if I need bitcoin to buy another coin, like sometimes, sometimes we trade.
ETH versus US dollar tether. Sometimes we trade ETH versus Bitcoin to trade ETH versus US dollar tether you need tether in your account. So if tether is where you store your money, you can just buy it straight away. But if we're trying to trade eth against bitcoin, you first need bitcoin, then you use the bitcoin to buy the eth. Making sense. So in that case, if you're sitting in tether, you got no bitcoin, but you need to buy Ethereum against bitcoin, you need to first buy bitcoin, then buy eth.
So I shift a little bit of money to bitcoin to place my bitcoin trades, but then if it's not needed, I shift it back. That way I minimize the risk of having assets unmanaged in a currency that that fluctuates. A.
Sam.
