The Crypto market is highly dynamic, and changes are coming into the market every day. There was a time when there were only a handful of cryptocurrencies and today more than 10,000 cryptocurrencies are circulating in the digital money market. Bitcoin which was once I’d with apprehension is now considered to be one of the most popular choices for investors. Its rising value growing usage and inclination of even governments to accept it as a legal tender signifies the growth of crypto Currency.
With all this in consideration, we cannot undermine the fact that cryptocurrencies are often associated with volatility and price fluctuation. It’s not the case that the stock market doesn’t undergo frequent price changes or sudden dips in the market but when it comes to cryptocurrency, it enjoys a fair share of wrought by those who consider it to be a bubble that won’t last for long.
This makes crypto investors sceptic from investing in cryptocurrencies, however, the fact cannot be denied that cryptocurrencies are hereto stay. Several cryptocurrencies are now revolutionizing how the market operates. With more than 15,000 organisations globally accepting bitcoin and more than 600 crypto exchanges, trading has become easier than ever.
But an important aspect that every investor needs to combat is how to manage or cope with price volatility. It can significantly impact the return on investment and hence following the right strategy is important. One of the key tips that most investors there is that one must add different cryptocurrencies to their portfolio. The stablecoin can be your safe bet. Let’s explore more about stablecoins.
What are stablecoins? A brief overview
A stablecoin is less like cryptocurrencies but their value is associated with real-world assets. These are collateralized to either board or oil or metals or Fiat currencies. Because of this feature, the volatility doesn’t impact the stablecoin as much as it impacts other cryptocurrencies. Hence if you want to create a buffer when it comes to investment, investing in stablecoins is the right option.
10 Key Features Of Stablecoins- Points To Note
This section of the article highlights 10 key features that every stablecoin user should know about which are as follows-
- Cryptocurrencies are digital assets that maintain a stable value.
- These coins are backed by assets which can be either a cryptocurrency or a Fiat currency or gold
- You can use stablecoins to store value make payments and do other financial transactions
- Some stablecoins are also attached to specific assets which maintain their stability
- There are different stablecoins in the market having their own set of pros and cons
- Stablecoins are the latest entrant but a great way to manage your investment portfolio with stability
- careful research before investing in it is a must
- They have the potential to bring stability to the cryptocurrency market
- Although the value of a stablecoin is associated with real-world as but we cannot ignore the fact that sometimes its values might from but that is a very minimum value.
- These are new and have untested technology behind them, hence undergoing dynamic changes as of now.
Types Of Stablecoins To Know About- Points To Note
The following section highlights the key classification of stablecoins which are as follows-
- Fiat-backed stablecoins-As evident from the name, these cryptocurrencies are backed by Fiat currencies or real-world currencies like the dollar or euro. One example of this is Tether (USDT).
Crypto-collateralized-These cryptocurrencies are backed by crypto itself like bitcoin. Their market value is impacted by the value of collateralized cryptocurrencies. The most popular crypto-collateralized stablecoin is MakerDAO (MKR), which is pegged to the US dollar.
- Non-collateralized stablecoins-These are not backed by any acid rather they have full faith in the credit of the issuer. The most popular non-collateralized stablecoin is Basis (BAS).
Conclusion
The key classification and definition of stablecoins would have given you an insight of what are the different types. This way, you can get help in making informed decisions when it comes to Bitcoin investment. Once you have decided on the cryptocurrencies in which you want to invest, the next phase is to register yourself at Bitcoin Smarter, a reliable crypto trading platform for enthusiast crypto traders.
Follow our socials Whatsapp, Facebook, Instagram, Twitter, and Google News.
