Cryptocurrency trading might be a super-beneficial way to generate revenue even with small investments. But as we all know, it comes with a lot of risks, and the most common one is the risk of the rate change in the moment of transaction completion. Imagine, you choose the exchange partner with the best rate, calculate the preliminary amount you suppose to receive, press “exchange” and… Receive 30% less!?
A technology, that helped to get rid of this risk appeared on the market quite recently: more and more exchanges implement Fixed Rate Exchanges option. That means, that user knows the exact amount of coins/tokens to be received after the transaction completion. But at the same time, Fixed rate is usually not the best…
So what are the advantages and disadvantages of both, Fixed and Float exchange options and which one to use? Let’s find our below together!
So what is about the trading risk?
Crypto trading takes place in a live environment, so assets exchange rates are subject to constant fluctuation. This is why it is almost unreal to predict the result of each particular exchange with 100% certainty. The situation is aggravated by the fact that transaction could take a significant time (around 30 minutes) on some cryptocurrencies due to blockchain problems or poor cap.
There are a lot of cases when the rate has been changed dramatically both to better and worth side in just 30 minutes gap within 24 hours:
BTC Max. $10,617.06 — Min. $9,993.39 Source: Coinmarketcap
ETH Max. $225.48 — Min. $210.84 Source: Coinmarketcap
LTC Max. $98.75 — Min. $90.97 Source: Coinmarketcap
As a rule, the amounts of funds the user receives in the result of the transaction is around the predicted one. Sometimes user can benefit from rate fluctuation, sometimes loose, but in the majority of cases, these fluctuations are not really significant. But exceptions also take place.
Float vs Fixed rate
ChangeHero offers both: Fixed and Float Rates for assets swaps. Fixed rate basically ensures that the result of the transaction is predictable and risk-free, while for Float rate it is dynamic. Depending on the circumstances, the user can choose to take a risk by selecting Float Rate, which is also named “Best rate” at ChangeHero platform, or would rather choose to protect their assets with Fixed Rate, which is also a bit less profitable. Let’s have a deeper look at how both methods work.
While exchanging your crypto on a Float rate, you see the best available rate among 5+ traditional exchanges at ChangeHero calculator. The estimated amount of assets to receive in the result of the transaction is not precise and the result could differ. ChangeHero just shows you the best rate available in the exact moment of time. So making the transaction on Float rate, you can be sure that you have the best rate on the market, but you are not safe from the market dropdown itself. This risk is still on you.
When you select the Fixed rate option, ChangeHero makes a short-time price prediction, proposes you the rate and calculates the exact amount of coins/tokens you will receive in the result of the transaction. The rate is fixed for you for 10 minutes, from the moment of the transaction. That means, you have 10 minutes to send your funds to ChangeHero. You also need to send the exact amount confirming the transaction. Anytime the transaction can not be completed and the funds will be returned to you. On the Fixed rate mode, ChangeHero takes the risk of the rate change and guarantee that you get the exact amount of funds. But usually, Float rate is better than Fixed.
What rate to choose?
ChangeHero offers the opportunity to benefit from both, Fixed and Float rates depending on each particular transaction circs. For example, when the market is highly dynamic and price indicators change every minute, it makes sense to catch relatively good Fixed rate, and complete the transaction without the risk of losing money on the rate fluctuation. On the opposite situation, when there is a strong positive trend on the market, it will be more profitable to swap your assets at the best Float rate.
There are a lot of other market situations what we can’t really predict and therefore advise you which rate to choose. To help you make a decision, we summed up all the differences:
- Exchange commission: running transactions on Float Rate comes with ChangeHero service fee, while on the Fixed Rate you agree on the exact amount to receive in the result of the transaction.
- Transaction amount: the amount of coins/tokens you send for exchange should be exactly the same as in the confirmed transaction data for the Fixed rate, as ChangeHero guarantees you a certain amount of assets to receive. But for Float rate — you can send any amount below the minimal. All your funds will be exchanged at a current rate.
- Amount to receive: you always know the exact amount of assets you will get in the result of Fixed rate transaction. For the Float rate we calculate the preliminary amount to be delivered.
- Time limitations: Fixed rate is valid only for 10 minutes. That means you supposed to send your funds within this time gap. For Fixed rate exchanges you can postpone your fund’s transfer and complete the transaction later.
- Transaction address: Float rates exchange mode enables you to make a transaction with the same ChangeHero pay-in address. While for the Fixed rate exchange mode it is valid only for a one-time payment.
- Who takes risks? ChangeHero takes the trading risks for you in Fixed-rate exchanges. For Float rate, the risk of the rate change is still on your side.
Swapping your assets on ChangeHero is a really simple and smooth process independently on the exchange mode. You just need to choose which rate to go — Float or Fixed, insert amount of coins/tokens to exchange, provide your wallet address(es) and confirm the transaction.
We are happy to offer the best Float and Fixed rates on the market and provide fast and reliable exchange service. ChangeHero platform is verified by BestChange moderation system and is trusted by thousands of traders every day. Follow our @Changehero_io Twitter to get more useful marketing information and trading insights. Hope to see you soon at ChangeHero.io!