Due to the volatility of crypto, stablecoins have become a popular option for crypto investors by providing some security and safety. Cryptocurrencies have become risky for many people. Stablecoins offer a hedge against volatility; there are a variety of stablecoins backed by different forms of value, each having its use case and its benefits. That said, there is always a risk with any crypto investments. Since no one regulates crypto, and anyone can create a coin and say whatever they want, you should do copious research to maintain an edge over this risky investment.
Best tips for choosing a stablecoin:
Stablecoins have their value tied to an asset, and the protection and security of that asset is of the utmost importance; choose a Stablecoin with a secure asset reserve, preferably one managed by independent holders. The reputation of the company backing the stablecoins is also critical; the company should have a solid reputation in the market. There are a lot of crypto frauds that have used stablecoins to con people out of billions of dollars.
The Best Stablecoins Right Now
Stablecoins are not all built in the same way; the choice of the stablecoin depends on the use you are trying to get out of it, the reputation of the organization behind it, and the risks associated with it in case something goes wrong.
1. Tether
Tether is the largest and most widely used Stablecoin in the world, with its value pegged to the United States Dollar, meaning its value remains stable at 1 USD. The USDT cryptocurrency is backed by Tether Limited, which is run and controlled by the owners of Bitfinex. In the past, the company has been in hot water a lot, as their claims were falsified in 2019 about how they hold their reserves. However, the company has been transparent for a while until now, in 2021- Singlelunch.com explains what’s going on. In the last quarter of 2023, Tether is listed at 1.00 per coin, maintaining that since I’ve been watching in 2021, it’s stayed the same.
2. USD Coin
USD Coin is a coin introduced by Coinbase, one of the world’s largest cryptocurrency exchanges; just like Tether, the price of USD Coin is pegged to the United States Dollar. The companies behind USDC are Circle and Coinbase, both U.S.-based companies that operate in a heavily regulated market. USD reserves back the USD Coin with an independent contractor.
3. Binance USD
Binance is one of the largest cryptocurrency exchanges in the world; based out of Hong Kong, the company is known for its size and influence in the crypto world. However, the company could have a better reputation for security; their exchange has been hacked multiple times. Their currency is also a commodity and fiat-backed cryptocurrency. In the last quarter of 2023, Coinmarketcap gives them a pretty poor rating.
4. DAI
Based on the Ethereum blockchain, MakerDAO’s Stablecoin DAI is also pegged to the United States Dollar. An automated intelligent contracts system on the Ethereum blockchain monitors the stablecoin’s price. The stablecoin is backed by a consortium of cryptocurrencies, which are overcollateralized. Users of Ethereum can use their Ethereum for DAI at 150%, meaning $150 in Ethereum gets you $100 in DAI. MakrDAO is considered one of the premier cryptocurrency companies, developing cutting-edge De-Fi and crypto solutions with an excellent reputation for sticking to the rules. Updates in August 2023 on deposits.
5. PAX Gold:
PAX gold is a stablecoin backed by gold reserves; the Stablecoins price is kept equal to one ounce of solid 400 oz gold. If you own PAX, you own one ounce of gold held in a secure reserve by the company PAX. PAX is a well-known company in the crypto world with more stablecoins and has a good reputation in the market, following all of the requirements.
These are a few of the top stablecoins to consider looking into. Always research and ensure that whatever you invest is money you’re okay with losing. There are a lot of changes coming to the crypto space, so keep up to date on what’s going on with tax prices and look for any potential challenges; please make sure there are no scams before getting into crypto.
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Disclaimer
I want to make it unequivocally clear that I do not promote any cryptocurrency, nor do I endorse any crypto investments. This website is dedicated to providing information and insights into the world of cryptocurrencies to help you better understand what crypto is.
If you ever find yourself in a position where you need to explain your decision not to invest in cryptocurrencies to friends or acquaintances, you can use the content on this site as a guide to discourage people from falling victim to scams or making hasty financial decisions. My ultimate goal is to empower individuals with knowledge and awareness so that fewer people become financial victims.
Life is already challenging with its inherent obstacles; we don’t need the added burden of unscrupulous individuals looking to exploit our hard-earned money. Stay vigilant, stay informed, and make financial decisions with caution. Your financial well-being is of paramount importance, and it is my sincere hope that the information here can assist you in making prudent choices.
