The emergence of currency facilitated the exchange of goods among farmers, enabling them to swap a bushel of wheat for other essential commodities. It simplified the valuation of products and streamlined trade by eliminating the complexities of bartering. Despite the potential for lucrative returns that Bitcoin’s volatility offers to investors, those unfortunate enough to suffer losses due to its price fluctuations seek a swift and convenient transition into a more consistent asset – introducing stablecoins as the solution. If you are looking for a safe and secure trading platform for Bitcoin, you can simply visit bitai-methods.com.
What are Stablecoins?
Early crypto investors have long demanded a digital asset that would rival fiat currencies such as the dollar or the rupee, resulting in the creation of stablecoins. These investors sought a reliable means of retaining value over extended periods, sans the volatile fluctuations that have plagued cryptocurrencies in the past. They also needed a convenient method for transferring this value, such as a mechanism that would enable investors to convert Bitcoin profits into a stable value similar to the dollar and withdraw it to a bank account or reinvest it elsewhere. Hence, the ‘stablecoin’ emerged as a solution to address precisely these concerns.
Exploring the Benefits of Stablecoins for Cryptocurrency Investors and Traders
Stablecoins have revolutionized the world of cryptocurrency trading, providing a reliable and efficient solution for investors. Given the non-stop nature of the crypto market, with trades happening around the clock, stablecoins have enabled investors to easily exit their positions and rest easily without worrying about overnight market volatility. Moreover, the use of stablecoins has simplified the process of transferring funds between crypto exchanges, eliminating the need for cumbersome banking procedures and enabling quick and hassle-free transactions.
Stablecoins have provided investors with a convenient and reliable way to hold a portion of their cryptocurrency portfolio similar to cash. With stablecoins, investors can easily purchase any coin on short notice without relying on their banks’ servers, which are known to be occasionally unavailable due to maintenance or other issues. Furthermore, some experts attribute the increasing popularity of stablecoins to the widespread adoption of cryptocurrency trading since 2014, and the subsequent growth in coin values.
Some Leading Stablecoins in Crypto Market
USD Coin (USDC)
Launched in 2018, the USDC operates with a limited supply that is backed by a reserve of US dollars, instilling confidence in its stability. Its founding member, Coinbase, has achieved regulatory compliance, further reinforcing trust in the cryptocurrency. With widespread acceptance across major exchanges and growing adoption in DeFi, DApps, and gaming, the USD Coin is positioning itself as a versatile and reliable digital currency.
Dai token operates on a unique supply limitation system. Unlike other stablecoins, Dai’s collateral is not restricted to US dollars, which led to a balancing act in early 2019. It primarily finds utility in DeFi protocol services, where it’s flexibility and decentralized governance have made it a popular choice. Launched in 2017, the Dai token has steadily added financial services, expanding its use cases. Its autonomous governance system through MakerDAO enables decentralized issuance of Dai tokens, allowing any user to mint DAI by depositing Ether tokens as collateral.
TrueUSD made a limited entry into the stablecoin market in 2018, asserting its position as the first fully US dollar-backed stablecoin with regular audits. The audits provide transparency and assurance that the supply is backed by the US dollar. Despite having relatively low daily churn/trade, TrueUSD offers DeFi and staking services for users to earn returns on their holdings. In addition, the company has forged a partnership with a bank to enable digital payments and is incubating several ‘digital asset to DeFi’ projects, indicating its commitment to innovation and growth in the cryptocurrency ecosystem.