If you’ve been following the news about cryptocurrency and the blockchain, you might have heard people talking about Bitcoin and Ethereum, a common base for many ICOs. But recently, there has been a new invention in the blockchain sphere that is stable on both price and volatility. This is called a stable coin. A stable coin is a cryptocurrency that is tied to another asset and whose value is maintained by the asset itself.
Stable coins have become popular due to their use-cases in the financial world, for example, being used as a layer on top of cryptocurrencies like Ethereum to create more stability and efficiency within the existing crypto ecosystem. Another example is that some stable coins are pegged to fiat currencies, so they can be used as a medium of exchange for them. Also, some companies have been using stable coins for their ICOs because they are much more flexible than the existing cryptocurrencies. And visit the bitiq official site to learn more about bitcoin and bitcoin trading strategies.
What are stable coins?
Stable coins are digital tokens that have a fixed value. They make the price of a cryptocurrency more predictable in time. This is done by implementing rules of price-fixing within the blockchain. They are all cryptographically secure, which makes them as transparent, if not more, as centralised forms of money. This also makes them faster and cheaper than traditional transfers.
Stable coins solve one of the major problems facing cryptocurrencies: volatility. Because the tokens are linked to real-world assets, their value is less prone to speculation and changes in demand.
There are two types of stable coins:
- Stable coins which peg their value to the fiat currency, and
- Stable tokens are backed by other cryptocurrencies. They are usually priced at a fixed rate, making them difficult to manipulate.
Stablecoin Vs Bitcoin:
Stablecoins have come to the news in 2017 as some investors have now realised that cryptocurrencies are not as volatile as before, and stable coins are here to prove themselves. Stablecoins are being used as a newer form of liquid assets to provide investors with a safer and more efficient technology alternative. The idea of stable coins is similar to that of bitcoin. However, stable coins have different features when compared to other cryptocurrencies. The most important feature of stable coins is their stability.
Stablecoins are the new generation of digital assets; they are important because they allow investors to make more stable returns on their investments. In the past, investors have found it difficult to make a profit in cryptocurrencies because of their high volatility when compared to other investment options. Bitcoin has a price that moves up and down depending on various factors affecting it.
Why is Stablecoins Becoming Popular over Bitcoins?
Stablecoins are the new generation of digital assets; they are important because they allow investors to make more stable returns on their investments. In the past, investors have found it difficult to make a profit in cryptocurrencies because of their high volatility when compared to other investment options. Bitcoin has a price that moves up and down depending on various factors affecting it.
For example, when there is good news about bitcoin or cryptocurrencies in general, the price can rise drastically. Similarly, when there is adverse news such as hacking incidents and so on, the price of bitcoins can plummet. In some cases, the value of bitcoins can even fall to zero. This is why it is essential for investors to look for a better investment option that offers greater stability to their investments. Stablecoins are one such option that provides investors with a safe and stable means of making their investments profitable again.
When it comes to using a cryptocurrency such as Bitcoin, stability is an important factor. This is because when the value of a cryptocurrency increases, the price becomes too high for many investors to purchase it. On the other hand, when the value of a cryptocurrency decreases, many investors find it hard to sell them and make a profit. In such cases, stable coins can be used to buy bitcoins at an affordable price and to sell them at a higher price when their value increases again.
Final Thoughts:
Stablecoins are becoming popular in the blockchain world because of their high market cap and because they provide investors with high returns at a lower risk than other digital assets. Stablecoins are also cheaper when compared to other cryptocurrencies, which makes them a good option for all types of investors looking for a safe and reliable investment option. Stablecoins can prove to be more profitable for investors than Bitcoin, as Bitcoin is currently experiencing more volatility than stablecoins.
So if you are looking for a safe and stable investment option to make a profit, then stablecoins can be your best option. They offer the same features as bitcoins but at a lower price. You can use stablecoins to invest in cryptocurrencies such as Bitcoin, Ethereum, or any other cryptocurrency at a cheaper price. Stablecoins help you to maintain value rather than going through volatility, which is common among other cryptocurrencies.
