Base Assets explained
One of the first things you have to do when creating an API key for the BOTS platform is select a base asset. But how do you pick the right base asset for your strategy, and why is this so important?
Base Assets explained
BOTS wants to make sure that everyone in the world has the opportunity to build a second, passive income through investing. To do so, we need the help of our bot creators. But what can you expect from us, what do we expect from you, and how do things work? Let’s tell you all there is to know.
Let’s take a look at base assets. One of the first things you have to do when creating an API key for the BOTS platform is select a base asset. But how do you pick the right base asset for your strategy, and why is this so important?
What base assets are there?
As you most likely already know, your base asset is the asset you return to when you’re not in a trade. So when you’re not exposed to the market — this is where you go back to. At the moment, we have three base assets to choose from at the BOTS platform: Ethereum, Bitcoin, and USDT. Which one you pick can make quite the difference in the overall return of investment (ROI) of your bot.
Happily ever after?
Let’s say you choose BTC as your base asset. When the price of BTC goes up, in theory, your base will have increased in value. But obviously, your bot will make trades. So say your bot made a beautiful trade amid a BTC price increase and exited right after. Excellent: you just made a nice ROI for the users of your bot.
Now imagine this scenario: you’re trading a particular coin, and the market drops. No problem: you go back to your base asset — Bitcoin. But what if the BTC dropped as well and continues to drop? In this situation, you’d be stuck between two dropping coins, without a safe haven to return to.
Why choosing the right base asset is so important.
This is precisely why choosing the right base asset for your algorithm is so important. You’ll want a safe haven to return to without too many losses or, if you’re willing to take some risks, you might feel pretty confident when your bot has more exposure to the market. Do you want your customers always to experience the risk and fluctuations of the crypto market, or do you want them only to experience those fluctuations when they’re going your way?