The question of how to choose a coin to stake is not so simple. When choosing digital assets, it is important to take into account the factors that affect quotes, volatility and trading volume for certain types of cryptocurrencies.
Thus, only a balanced approach and regular monitoring of the situation in the cryptocurrency market reduce the risk of turning investments into a loss-making investment.

How to choose a coin to stake?

 

Firstly, in order to conclude an agreement with the exchange, a trader will need to purchase a certain amount of cryptocurrency.

Usually this amount is perceived as a kind of “free asset”. Its loss due to an unforeseen price collapse will not cause serious financial damage to the owner. As a result, this is money, the loss of which will not become ruinous.

Many traders, having first understood the rules of staking, then form their passive income. They receive profit due to the increase in the price of several tokens at once from different exchanges. At the same time, they do not need to closely monitor each individual digital asset. Due to the volume of investments, as well as their diversity, a positive balance is achieved.

Such a diversification strategy reduces the overall risks, since when one cryptocurrency “sags”, another rises in price. In total, digital assets, thanks to their staking, bring the owner a good income in comparison with the rates of bank deposits for fiat.

For example, the returns from staking the following assets average:

  • Solana – 7% per annum;
  • CAKE – 60% per annum;
  • ALGO – up to 6.1% per annum (depending on the wallet);
  • BNB – from 15 to 25%, as it depends on the wallet.

Criteria of choice

Based on these features, when choosing a coin on a particular platform, it is most important to consider the following conditions:

  • volatility – preference is given to assets with a stable exchange rate, not subject to sharp and unpredictable price fluctuations;
  • the minimum amount of the contract – it depends on how much money a trader can direct to buy one type of cryptocurrency or several at once;
  • trading volume – with high rates, there is less risk of depreciation of an unclaimed asset, and also a high profitability of staking is more likely.

These indicators are “calculated”, but there are others:

  • usefulness for the market and users of the project that issued this coin;
  • the reputation of the team that worked on the blockchain;
  • openness – for example, it is easy to get acquainted with the list of key investors and project partners;
  • long-term plans of the team and how feasible they are, because staking is earning on cryptocurrency in the long term.

The most reliable coins are those that are in the top 10 or close to it, according to the analysis of the aggregator Coinmarketcap. As a result, coins are considered the most reliable:

  • ETH;
  • Cardano;
  • BNB
  • Solana;
  • Terra.

How long does a portfolio of digital assets remain relevant?

 

When it comes time to decide how to choose a coin for staking, traders analyze the current situation in the cryptocurrency market in general, as well as on a specific site. This information quickly becomes outdated. According to exchanges such as Binance or OKEX, the portfolio should be reallocated at least every 3 months or even more often