Why trade ADA USDT vs ADA BTC?

bitcoin

#1

What would be the reason for a long term investor to choose to one pair over the other? For the purpose of this thread, please assume that USDT is no longer facing a ton of questions about its legitimacy. I certainly won’t make any switch until that uncertainty is resolved. My question is about trying to understand the basic concept of why it would or would not be beneficial to switch any of my holdings from ADA BTC to ADA USDT if USDT turns out to be legit.


#2

In terms of trading into or out of ADA and assuming all trading pairs are legitimate (ADA/BTC, ADA/ETH,ADA/USDT, etc.) I would generally choose the pair that is the fastest or cheapest. If one pair is both the fastest and cheapest, that’s probably the pair I would use.

Also, it may depend on what you plan to do with the BTC/ETH/USDT after selling your ADA. If you’re going to hold it, then use whatever aligns with your portfolio goals. If you are going trade into another coin, then you may be limited by the trading pairs of the other coin you’re looking to buy.

I’m HODLing all my ADA. But when I buy more currently I use ETH as a trading pair because it’s currently faster and cheaper than BTC and USDT is just not an option IMO.


#3

It doesn’t matter now how you got your ADA, that’s a sunk cost. Your holdings are just ADA, there’s no pairing involved. When it comes to buying or selling, you should choose whatever seems best at the time, but there’s no lasting effect, no commitment.


#4

They are all inter-independent of each other - they are just direct trading pairs - they are not connected in any way.

If you want BTC, you can trade ADA for BTC. If you want USDT you can trade your ADA to USDT… And in Reverse, if you are holding USDT or BTC you can trade them for ADA, the trading pairs are just a tool to do it in a fast and efficient way… You could also do ADA to BTC to USDT, which you would have to do if you wanted USDT if there wasn’t any direct trading pairs… Just like you can do ADA to USD to A pair of Shoes.

Anyone who thinks USDT is legit does not have a clue, so hold trade with USDT at your own peril, it will go to 0 (or be reduced to a fraction) one day - Its holding a hot potato… Ive used USDT before for short periods, but I understand the risk.

If they are very smart in the market-making of USDT, they could potentially back it over time from the profits of such operation… As an example like Binance charges a 0.1% fee on every trade, and with volume of the crypto-market that profit could potential be used to back it - It could be such a scheme they are doing behind the scenes – but there is no doubt it was not backed from the start.


#5

Hey guys, thanks. I really appreciate all of your answers and understand much better now. Much appreciated!