How to use cryptocurrencies for low-risk investments for investors seeking stability｜ACE Exchange

What are cryptocurrencies?

1. Decentralization

2. Transparent and open transactions

Compensation in Cryptocurrency and Traditional Finance

After introducing cryptocurrencies, the next most important thing that many investors are most concerned about is the rate of return. The following are some of the investment returns of traditional finance and cryptocurrencies for your reference:

Bank interest rates

The average interest rate for current deposits in traditional bank accounts is around 0.15% to 0.2%, while the interest rate for fixed deposits is around 1.52% to 2.0%. Although the interest rates for digital accounts launched in recent years are higher, there is a maximum amount limit and the average interest rate is between 1% and 2.6%. Because of the low rate of return, the risk of putting money in a bank is also the lowest.

Bonds

Bonds have different returns depending on the length of time to maturity and the level of risk. Calculated on average, the long-term annualized rate of return is approximately 3% to 6% (the rate of return will be affected by the then-current benchmark interest rate and the level of bond risk). The overall return is slightly lower than that of stocks in the long run, but it is more stable and has relatively small price risk fluctuations.

stock

In the stock market, a long-term annualized rate of return of 5-8% is considered a very good result. However, compared with the bank interest rates and bonds mentioned in the first two items, the risk of stocks is much higher. Investors need to spend more time choosing stocks that are suitable for their investment.

Cryptocurrency

Cryptocurrency produces different results depending on the financial product.

Cryptocurrency Trading

It is often said that "one day in the cryptocurrency world is like ten years in the real world." The rise and fall of many cryptocurrencies are quite different from those of the traditional financial stock market. On average, the expected rate of return for investors trading cryptocurrencies such as Bitcoin and Ethereum is about 30%, while for meme-type cryptocurrencies such as Dogecoin and Shiba Inucoin, the rate of return can reach 200%. However, the risk of trading cryptocurrencies increases with the amount of returns obtained, so be sure to carefully evaluate and consider before investing.

Cryptocurrency staking

In addition to cryptocurrency trading, various project parties will also provide cryptocurrency staking to increase the liquidity and verification mechanism of tokens. Without considering the increase in the cryptocurrency itself, the average return rate of cryptocurrency staking is about 20%.

Stablecoin claims

Among cryptocurrencies, there is a type of coin called stablecoin, whose price is anchored to fiat currency and is less susceptible to cryptocurrency fluctuations. Major exchanges also provide exclusive stablecoin claims for consumers to purchase. Taking ACE as an example, ACE provides stablecoin debt purchases (if you want to purchase ACE debt, click the link to register an ACE account). Based on the six-month debt, the annualized rate of return is 8%. Although it is not as good as the rate of return of other cryptocurrencies, this low-risk investment is also a good choice compared to traditional financial products. The above is some information we have compiled for you. In a bear market, stablecoins can be used as a parking place for cryptocurrency funds and to increase some passive income. However, this article does not constitute investment advice. Please carefully evaluate before investing and choose financial products that suit you.

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