Amid market volatility, traders and investors are usually uncertain about whether to hold on to their assets or sell them. This is because after selling off, the market can make an unexpected move that would either favour holders or not.
In this piece, we will examine factors to consider before deciding whether to sell or hold your USDC.
Factors to Consider Before Selling USDC
It is vital to consider some factors when deciding to sell your USDC asset.
1. Market Volatility
This is one of the first things to check when making a decision on holding or selling. The overall market trend is a major precursor to making your decision. If the market is bullish, you can sell your USDC to invest in other coins for profits, and if the market is bearish, you can hold your USDC to preserve its value since it is a stablecoin
2. Personal Financial Goals
Holding or selling is also dependent on your personal goals. If you have purchases planned out, then you may go ahead and sell. However, if you have a plan to save, you can consider staking your USDC so that you can lock it for a while and also earn rewards on it while it is locked in a staking pool.
3. Inflation and USD value
One reason people keep their money in USDC and not in many other cryptocurrencies is the stability of its price. However, in the event of a sudden rise in inflation, the purchasing power of USD may be reduced, and that may be an excellent time to sell.
4. Crypto Regulation by Government
Government regulations often impact the overall market trend. Regulations favouring the crypto market will further strengthen UDC’s stability, and in such cases, it is advisable to hold. When the reverse is the case, it’s better to sell.
Benefits of Holding USDC
Holding USDC has many benefits, the best of which is that it helps to secure your finances in times of extreme market volatility.
You can also stake it or lend it out on DeFi platforms for yields over time. This can be a form of passive income, even without necessarily trading. Users also use USDC as collateral for loans on DeFi platforms.
Practical Tips for Cashing Out USDC
1. Use a Reputable Platform
When you decide to sell your USDC, a reputable platform like Breet is recommended so that you do not lose your funds and also get the best value for USDC exchange in your fiat currency.
2. Consider Tax Implications
Various locations have tax systems that may impact the price at which you sell your USDC. Keep this in mind when cashing out your USDC.
3. Timing
Just like every other decision in life, it is important to be aware of what’s happening in the crypto market before proceeding to cash out. Questions like, “Are we bullish or bearish season?” should be asked.
Frequently Asked Questions (FAQs) About Cashing Out or Holding USDC
What is USDC, and how is it different from other cryptocurrencies?
USDC is a stablecoin pegged to the US dollar, so unlike some other cryptocurrencies, it is not prone to extreme price volatility.
Is it better to hold or cash out USDC in a bear market?
Holding USDC in a bear market can help safeguard your funds and preserve its value, as USDC has significant price stability.
Can I earn interest on USDC while holding it?
Yes. DeFi platforms that allow users to stake USDC offer you a chance to earn interest on your USDC asset.
Are there fees involved when cashing out USDC?
Depending on your location, transaction fees and taxes may be involved when cashing out your USDC.
How do crypto regulations affect holding or selling USDC?
Crypto regulations can have a direct or indirect impact on your USDC asset. In your location, the government might impose a sudden ban on crypto, in which case it is better to sell off.
Conclusion
The decision to hold or sell your USDC is largely dependent on you. Several factors that can inform your decision, like inflation, personal needs or goals, regulations, and many others, have been thoroughly discussed in this piece.
Whether you choose to hold or sell, the key is to stay informed about the market so that you can maximize it and benefit from its offerings.
