Bitcoin’s popularity is indisputable, and well deserved. In the little-more than a decade that it has been around, Bitcoin has completely changed the financial market, and gained a massive rise in value, going from under a dollar in 2009, to a staggering $34.000 dollars in 2024. The current value is around $50,000, while the peak price was over $65,000 several months ago.
However, many people are worried about the long-term profitability of bitcoin, and other cryptocurrencies in general, as cryptocurrency is known for its high-levels of volatility, and its rapidly fluctuating prices.
In order to combat this notion of cryptocurrencies’ volatility, crypto programmers and developers have come up with an idea that incorporates the advantages of cryptocurrency, with the stability of fiat money. The idea was called Stablecoin.
In this article, we will take a look at what Stablecoin is, and list some of the best Stablecoins on the current market.
Cryptocurrency’s Volatility
Source: cryptopolitan.com
Being the first, and best, Bitcoin is the undisputed king of the crypto world. That said, Bitcoin, much like every other cryptocurrency, still has its fair share of fluctuations, and Bitcoin prices undergo high levels of volatility. Bitcoin isn’t the only cryptocurrency that has to deal with rapidly changing prices. All cryptocurrencies are subject to the volatility of the market.
One way to combat the volatility of the market is by making an account on one of the many crypto trading sites. BitcoinBillionaire uses AI technology to read and predict the wild fluctuations of the crypto market and ensure users can turn a profit.
While it represents a challenge, it is also the main reason why so many people are interested into investing in this market in the first place. The prices can change several times during the same day, and when it comes to highly valuable assets like BTC, these changes are measured in thousands of dollars. Therefore, you can make profit by determining the right time during the day when you can invest, and then sell for a higher price.
Stablecoin
Source: theverge.com
The volatility of cryptocurrency makes it hard for it to be used in everyday life, for the essential transactions we all make. The main purpose of currency is to retain stability over longer time periods, and to that end, a subsection of cryptocurrency was created, with the goal of retaining stable value, and being able to be used in daily life.
As we already mentioned, the main advantage is that you can secure your funds from high volatility. While the profit potential is lower, you will still get the benefits like fast transactions, access, and more. The process of buying is the same as when you want to buy crypto. It became popular on many online exchanges to offer these assets. Some of the most popular options are Sofi, Coinbase, USDT, Dai, and more.
Stablecoins, as they are called, offer the advantages of cryptocurrency, such as anonymity, autonomy, decentralization, etc. with the added benefit of retaining stable value. One of the first, and most famous Stablecoins is Tether.
The Tether Foundation, in 2014, came up with a brilliant idea to maintain the stability of Tether’s value. For each Tether unit sold, the Foundation would keep $1 in reserve. This practice helped stabilize the value of Tether at one dollar, as one unit can be redeemed for a dollar which is kept in reserve.
Other Stablecoin Options
Source: theconversation.com
While tether is the first, and most famous Stablecoin, it isn’t the only one. There are many other options to choose from when it comes to Stablecoin, and we will take a look at just a few of them now.
True USD (TUSD) is the first regulated Stablecoin. Backed by the US dollar (hence the name), True USD’s main appeal stems from its transparency and accessibility, as it does not use any particularly difficult algorithms. It was introduced in 2018, with the goal of combating volatility, and fluctuating rates associated with the crypto market, and providing an alternative to Bitcoin or Ethereum. The current price of True USD is valued at $1.
Binance USD (BUSD) is another dollar-backed, regulated Stablecoin, which distinguishes itself through the speed of its transactions, and through the fact that you can use it on the global crypto market. The most appealing part about Binance USD is that users don’t need to pay fees when redeeming or creating BUSD units.
Another popular option is Dai, which is a token that represents collateral in various cryptocurrencies. It is a great solution for people who trade on the market with a variety of coins and frequently convert them from one crypto to another.
The last Stablecoin we’ll look into is Paxos Standard (PAX). Paxos Standard is among the best Stablecoins, as it combines the efficiency of the blockchain with the stability of the US Dollar. PAX is issued by Paxos Trust Company, and it is created to be programmable, and able to be moved anywhere, all around the world. Paxos Standard is the best Stablecoin for people looking to make a good return on their investment.
What Are the Benefits?
Source: investmentu.com
One of the main advantages of using this form of digital assets is when you want to convert crypto into fiat money. The transaction on your banking account will be much faster. Also, you will need to pay much lower fees, and the great thing is that you can use all kinds of popular credit cards.
Besides that, the benefit of paying less for international transactions is still active, even though you will get your funds on the banking account. There are some legal benefits as well, which is the main reason why many countries might consider Stablecoins as the best solution for implementing higher transparency.
The global market can also get many advantages. The introduction of these assets is the best way to implement the crypto market into standard payment circles. For example, many companies can be secured by using this option and allowing people to easily shop with their e-wallets. Moreover, it is a more stable option since the value is backed-up with dollar or gold.
Summary
If you are interested into investing in the crypto market, but you want to avoid the risks related to high volatility, the best solution is to invest in Stablecoins. Also, it is a great way to start using your e-wallet for standard payments. In most cases, the only way to convert any digital currency on online exchanges Is to first convert them into provided Stablecoin.
Besides that, it is simplified so people can avoid the struggles related to the high complexity of this market. It is the best way to connect the crypto market with standard monetary system as well. Many countries are worried about the lack of transparency, and this is the best solution to make sure that people will report the profit made by investing in this market and start paying regular taxes.
