But is there anything you can do to help safe guard your investment? Yes, for one, you can use stablecoins, which are essentially alt coins that resist the effects of price volatility. Stablecoins hold their value almost exactly, and will only fluctuate 1%-3% on average. This can be a curse and a blessing, it will insulate your investment from bearish markets, but will also prevent growth of your bitcoin wallet's value in times of bullish behavior. It's great for people who want to time jumps in market price, but this often takes hours of research and planning, and you have to monitor the market to actually make the trades. The advantage of stablecoin is essentially the same as pressing the save button on a video game, it allows you to wait out unfavorable market conditions, consequentially enabling you to play the market.





The reason stablecoins even really exist is that many exchanges will not convert your BTC to USD within the exchange, or they will charge a substantial fee to do so. Stablecoins are just like any other alt coin, you can move from BTC, to a stablecoin, and back again, all within the exchange and all for a negligible price.





But how does this actually look on the exchange? Let's say you invest $1000 in bitcoin when the price is at $1000 per coin so you end up with 1 BTC in your wallet. You hold onto the BTC until the price is $1200, and then you trade your 1 BTC to a stablecoin like USDC for fear of a coming drop in price. You now have $1200 worth of USDC in your wallet. From here the price drops from $1200, to $800; well for you this doesn't matter because you still have $1200 worth of USDC. Great isn't it?





A different scenario, let's say from $1200 in USDC, the price of BTC drops to $1100, and you decide to trade the USDC to bitcoin because you predict that this price will come back up to at least $1200. You now have approximately 1.091 BTC in your wallet. Sure enough, the price then goes all the way to $1300, at which point you sell your 1.091 BTC, you now have $1418.30 USDC in your wallet. Still with me? Cool, because I want you to see the difference between trading, and investing in bitcoin. Had you only held onto your 1 BTC the whole way through, which was bought at $1000, you would only walk away with $300 profit in the end. However, it took less effort, and was less of a risk. That is what an investment wallet is.



