Blockchain and Cryptocurrency Beginner - About Risk Aversion in Crypto Investment and Fixed Savings and Flexible Savings

Risk aversion is sometimes the best decision… I know that there are people who always say something like, the only way to make a lot of gains especially in the cryptocurrency space is to take a lot of risks… While this is true to some extent, sometimes it is a good idea to avert risk and take the safest way possible. Not all risk eventually turn out successful or profitable, some risk can be disastrous and lead to huge losses. For me, I have taken risks when investing in cryptocurrencies, and some of the risks became losses. While some risks have yielded big returns.

Before I delve deeper, it is important to understand what risk aversion is. Risk aversion is basically the act of taking the safest way possible when investing in any cryptocurrency in order to reduce any chance of losses. In other words, when an investor focuses on risk aversion, the investor prefers to make the least profit just to avoid any possibility of losses or failure.

For example, risk aversion allows an investor to only invest in things like savings that is more stable even though the profit or interest can be very low. When it comes to risk tolerance, mine is Moderate – because as an investor in any cryptocurrency, I prefer to have a balance between taking risks for huge profits and reducing risks to minimize losses. I am not bothered about the short term fluctuations in price, because I know that the investment would bounce back and make huge profits in the long term.

For me, my risk aversion is Flexible Savings - As an investor in cryptocurrencies, I find flexible savings more appealing… Even though the interest is low in flexible savings, I can accept the low-interest rate and still be able to withdraw my cryptocurrencies from savings any time I want because of uncertainties in the crypto space and volatilities of cryptocurrencies. We all know that anything can happen in the crypto space, so having the ability to remove my cryptocurrency from savings anytime I want is appealing.

Fixed Savings and Flexible Savings

Fixed savings is one of the savings type and ways to earn passive income on platforms like Binance. The name fixed means that the cryptocurrency asset will be locked for a certain period of time and can only be withdrawn from the fixed savings after the locked time frame is reached. On platforms like Binance that offer savings as a way to earn passive income, Fixed Savings is basically a type of savings where the cryptocurrency asset is locked for a certain time period… and once the time period is over, the cryptocurrency can be withdrawn from the fixed savings. This type of savings method has a much higher interest rate, but the only downside is that the cryptocurrency cannot be withdrawn until the fixed time duration is reached.

Flexible savings is also one of the savings type and a way to earn passive income on platforms like Binance which offers flexible savings. Flexible saving is a type of savings that allows saving your cryptocurrency and withdrawing without any lock time duration. This means that when saving a cryptocurrency in flexible savings, the cryptocurrency can be withdrawn anytime. The downside to this is that the interest rate can be very low compared to fixed savings which offers much higher interest rates.