June 17, 2021 |
James Messi
Beaxy Exchange added an additional stablecoin to fiat trading pair: USDC to EUR. USD Coin (USDC) is a popular stablecoin that is issued by Coinbase and Circle. One USDC is meant to maintain the same value as One United States dollar (USD). Digital assets are referred to as ‘stablecoins when the price is pegged to maintain parity with a national fiat currency.
The Euro (EUR) was first introduced to European countries as an accounting aid in 1999. This followed more than a decade of development for the currency that would be issued throughout the European Union. After three years of additional development as a currency used for accounting only, Euro coins and banknotes began to circulate throughout Europe and the rest of the world. According to Statista, they were roughly 1.3 trillion EUR in circulation in 2019.
The Benefits of Directly Converting Between EUR and USDC
In 2021, cryptocurrency traders and long-term holders still carry a preference for cashing out into their local fiat currency when it’s time to take profits and upgrade their lifestyle. For this reason, fiat currencies like the USD and EUR are used as the primary on and off-ramps that get people in and out of their cryptocurrency holdings.
The option to access a trading pair that enables conversions directly between a stablecoin like USDC and a fiat currency like the Euro is beneficial in both cases when a trader is moving EUR into the crypto market or cashing out their crypto as fiat.
When a trader is looking to onboard Euros into the cryptocurrency markets, they will often find that the digital asset that they want to trade or invest in is not available on the exchange that was able to accept their EUR deposit. This presents a few issues for the trader onboarding EUR. On one hand, there is no method to transfer EUR from one crypto exchange to another. On the other hand, if you convert to a non-stable digital asset like bitcoin, you take on the price risk of the asset while it is in transit from one exchange to another. Meaning that the value of the bitcoin you buy with EUR can drop significantly in the time it takes to be transferred to the next exchange.
Enter the USDC-EUR trading pair on Beaxy. Now, traders looking to onboard Euros can do so and convert them directly into USDC which can be easily transferred to virtually any other cryptocurrency exchange and does not expose the trader to price risk while the funds are in transit. This is a greatly preferred method of onboarding for EUR that will save you time and reduce the fees required to convert EUR into USDC. Without the USDC-EUR trading pair, two trades are required to convert EUR into a stablecoin like USDC. For example, selling EUR for BTC and then selling BTC for USDC.
Triangular Arbitrage Opportunities
Triangular arbitrage is a three-trade strategy commonly used in the foreign exchange markets. To take advantage of triangular arbitrage, you need to simultaneously engage with three separate trading pairs.
While this strategy requires more complexity relative to a standard arbitrage trade, the opportunities may present themselves more frequently. Particularly in the crypto markets where platforms such as Beaxy Exchange give all of their clients access to BTC through USD and EUR. Having the ability to trade crypto against multiple fiat currencies as well as other cryptos is crucial to the ability to execute triangular arbitrage.
Follow the example below to see how triangular arbitrage can generate risk-free profits by using a mix of crypto and fiat currencies on Beaxy Exchange.
Triangular arbitrage trading pairs: BTC-USDC, USDC-EUR, BTC-EUR:
Assume that we are starting with a balance of 1 BTC on Beaxy Exchange and 1 BTC is currently valued at 35,000 USDC, 1 Euro (EUR) is trading for 1.20 USDC, and 1 BTC is trading for 28,500 EUR.
The three trades required to make a riskless profit on this setup are as follows:
Sell 1 BTC and receive 35,000 USDC
Sell 35,000 USDC and receive 29,116.66 EUR
Sell 29,116.66 EUR and receive 1.023 BTC (29,116.66 EUR / 28,500 EUR)
In the example above, we began with 1 BTC and made three trades simultaneously that resulted in an ending balance of 1.023 BTC. Here, the hypothetical trader made a risk-free profit of 0.023 BTC.
Convert EUR to USDC Today
Trading in and out of fiat currencies has never been easier. Seamlessly convert Euros to a stablecoin when you sign up on Beaxy Exchange. Create your account today to buy, sell, or trade EUR on a secure exchange with low fees.
On average, Beaxy Exchange traders complete KYC in five minutes or less. The cryptocurrency that you hold on Beaxy is protected by Curv’s multi-party computation (MPC) security model. Fiat currency holdings are backed by FDIC insurance up to $250,000 per account.
Creating your Beaxy account to:
- Buy, sell, or trade dozens of digital assets
- Access automated indicators like Signals
- Become an algorithmic trader with Gunbot, Hummingbot, Autonio, and more
- Double your stack when you opt-in to the Deposit Bonus program’
And, more!
