Constant rise and fall in the price of cryptocurrencies has made people take interest in the industry. There’s an opportunity for one to make a big win in the market if positioned well.
Then there’s stable coins, a more safe investment but people tend to turn a blind eye to it. What do you think about stable coins? Are they worth it?
I will give you my answer but before that lets run a quick intro on stable coins.
A stable coin is a type of cryptocurrency that relies on more stable assets( like US dollar, gold, and metals) as a basis for its value.
It was created to provide stability to price volatility while still being able to benefit from its crypto part.
Some examples of stable coins include USDT (tether), DAI, USDC and BUSD.
Characteristics of stable coins
- They are decentralized.
- They have less volatility due to the various assets they have been paired with.
- They are able to interact with decentralized applications.
- They are secure.
Some uses of stable coin include;
- They are a safe haven for traders: because of the less volatile nature of stable coins. Crypto Traders prefer to keep some money kept in stable coins in case they run into a loss, most beginners use them to avoid trading fees too. They serve as a tool to help manage risk.
- It can be used for day to day transactions: stable coins make peer-to -peer transactions easier without the need of a third party because it is decentralized. If you are trading with a Japanese man, you don’t need to start thinking about creating a Japanese account to send money. The man could receive USD- backed stablecoins without having to convert it to Yen. It would even get to him faster that way than following traditional routes.
Stable coins have grown to become a big part of the crypto ecosystem. I find them worthy to be a part of one’s investment portfolio. How do you feel about stable coins? Yay or nay?