Stablecoins have an equal share of critics and enthusiasts. The former believe that these tokens contradict the very idea of cryptocurrencies, while the latter value their low volatility. Over the course of the year, stablecoins have become quite popular as they minimize the risks of investing in cryptocurrencies.
Diar specialists, in their latest study of crypto market trends, noted a significant increase in the volume of stablecoin transactions. The most popular of them, USD Coin (USDC), True USD (TUSD), Paxos (PAX) and Gemini Dollar (GUSD), have reached a trading volume of $5 billion over the past three months. Largely thanks to the active support of cryptocurrency exchanges and bearish trends in the market, stablecoins managed to increase transaction volume by 1,032% during the fall.
Stablecoins solve the problems of volatility present in cryptocurrency by offering the decentralized, secure features that cryptocurrencies enjoy. This digital currency has established itself as a priority in global financial systems and offers direction for cryptocurrency adoption in the future.
Risk-averse traders, buyers and investors need a low-volatility asset for transactions, and stablecoins fit their needs well.
Large crypto platforms have already considered the advantages of stable coins, adding stablecoins to the listing. And the largest of them, Binance, announced the creation of a single stablecoin market and is convinced that stable coins will soon appear on it related to other fiat currencies.
However, stablecoins can also present an unpleasant surprise, sliding from the established parity of 1 US dollar to a few cents in a couple of hours if the company does not have reserve reserves in the bank.
You May Also Like
They are going to fight Tether armed with the Bible
Texas finance professor John Griffin and his colleague Amin Shams published a study claiming that once the price of Bitcoin fell to a certain level, some traders would buy up the sagging asset through the Tether stablecoin, bringing the price back to its previous level.
Stablecoin Basis may disappear
This year, several stablecoins (Circle USD, Gemini Coin and PAX) have been listed on major cryptocurrency exchanges. For the first time since 2014, investors in the digital asset market have access to verified, backed and regulated alternatives to Tether (USDT).
