What is the most cost effective way to invest in stablecoins in Singapore?

This article is targeted at an audience who has an intermediate understanding of investing in cryptocurrencies. Follow me for more articles that breakdown the complicated process of incorporating “alternative assets” into your investment portfolio.

Cryptocurrencies have a notorious reputation for being volatile. Just take a look at the following chart to see how the price of the most famous of all cryptocurrencies, Bitcoin, fluctuates over the course of one year.

So it is quite meaningless to talk about a 5% to 8% annualised return when price fluctuations can be up to 10% to 30% in a week! This is where a “stablecoin” comes to the rescue: Such coins are, by design, stable, in that their prices track or are pegged to certain asset and thus do not fluctuate so significantly like other cryptocurrencies. But they retain other useful attributes of cryptocurrencies like low cost transferability and privacy.

Many stablecoins are not easily purchasable using SGD. Purchasing some of these coins require many steps and conversions before you can get your hands on them and most of these intermediate steps costs time and money (in fees and spread) to execute.

How much does it cost to obtain the stablecoin? The following chart summarises 3 options and their respective costs. This was done when the exchange rate was about 1 SGD to 1.35 USD.

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