Is EARN worth it?
Many people wonder if it is worth leaving a token in EARN after purchase.
In most cases, the answer is no. Let’s understand the reason.
Binance has a mechanism in which, when moving a token to EARN, it becomes unavailable for trading until it is redeemed. This means that the investor needs to choose between obtaining a passive income or maintaining the possibility of launching buy and sell orders. But which strategy makes the most sense?
There are two common approaches among traders:
Follow the market and react as necessary - The goal is to stay positioned while the market is favorable and leave quickly in case of a fall. In this case, there is no fixed sell order for profit, because the decision will be based on market behavior. However, to minimize losses, the trader usually sets up a stop loss.
Set a target and a loss limit from the beginning - Here, the investor already knows exactly how much he is willing to lose and what the profit goal is. Thus, he programs both the sell order for the gain and the stop loss simultaneously.
In both strategies, there is a need to launch orders in the market. However, this is not possible if the asset is in the EARN.
By choosing to leave a token in EARN, the investor loses the ability to protect his capital with a stop loss. In most cases, the income offered by EARN does not compensate for any loss caused by a devaluation of the asset.
An experienced trader always prioritizes the preservation of capital, because profit is a consequence of good risk management.
However, there is a situation in which the EARN can be advantageous: when the goal is HODL (to keep the asset for the long term). If the investor believes in the appreciation potential and does not intend to sell, regardless of price fluctuations, then EARN can be a good alternative to generate additional income.
So far, the asset with the highest yield in EARN was $KAITO, with more than 22%, while the lowest was $XRP, with 0.65%. The $BTTC token also stands out as an interesting option.
