While the crypto market is infamous for its volatility, stablecoins are a kind of cryptocurrencies that are linked to either stable fiat currency or exchange-traded commodities. Stablecoins are always preferred by new traders as it is considered a good stable investment that keeps them safe from the eye-watering volatility of the crypto markets.
Aside from that, stablecoins serve as a great enmeshment between the traditional financial system and the crypto market. So in general, people use stablecoins because it is regarded as a very reliable method of cashing out your crypto gains without having to go through the tedious banking procedures of the traditional financial system.
Normally, in times of bloodbaths like this bear market, crypto traders rely on stablecoins as an exodus from the crypto markets; however, the latest drama revolving around the algorithmic “stablecoin” UST called the entire concept of stablecoin into question to many not very noob traders. This article will discuss the top 5 USD-pegged stablecoins for new crypto investors that won’t take the infamous UST route.
Top 5 Stablecoins for New Crypto Investors
- USDT
USDT or Tether became a household name in no time as it pioneered the concept in the digital token space. Launched back in 2014 with the aim to facilitate the use of fiat currencies in a digital manner, it's no surprise that USDT is considered the most widely adopted stablecoin with a market capitalization of $74,135,142,311 and a daily trading volume of $63,598,134,832.
All Tether tokens (USD) are pegged at 1-to-1 with a corresponding fiat currency (USD) and are fully backed by Tether's reserves. To give traders some peace of mind, Tether keeps a daily record of our total assets and reserves.
- USDC
Ranking as the second-largest stablecoin by volume and marketcap, USDC has grown into a powerful market infrastructure with applications for individual traders as well as businesses of all sizes in nearly every industry since its inception in 2018. USDC is widely used throughout this transformative internet layer and flows seamlessly across many of the world's leading blockchains. With a market capitalization of $52,609,964,540 and daily trading volume of $6,933,582,646, USDC is issued by Circle, a global financial technology firm that’s at the center of digital currency innovation and open financial infrastructure. USDC aims at bridging the traditional financial system and the world’s leading public blockchains to unlock growth for businesses and investors around the world.
- BUSD
Issued by the largest crypto exchange, Binance, BUSD is is a 1:1 USD-backed stablecoin approved by the New York State Department of Financial Services (NYDFS), issued in partnership with Paxos. BSUD is the third largest stable coin with a market capitalization of $18,552,994,275 and a daily trading volume of $7,162,655,036. Using BUSD on its native blockchain platform, Binance, gives traders a good deal of zero transaction fee for BUSD/USDT, USDC/BUSD, TUSD/BUSD, and PAX/BUSD. Supported on both ERC-20 and BEP-2; BUSD allows you to transfer your dollars anywhere in minutes, with low cost and on the blockchain.
- DAI
Being the first-algorithmic stablecoin systems, Dai is an Ethereum-based stablecoin. Dai's price is soft-pegged to the US dollar and is collateralized by a mix of other cryptocurrencies that are deposited into smart contract vaults each time a new Dai is minted. With a market cap of $6,526,664,071 and a daily trading volume of $410,573,959, DAI is a self-claimed decentralized currency that does not discriminate believing that any individual or business can realize the advantages of digital money.
- TrueUSD
Minted on a 1:1 for U.S. Dollars, TUSD is the fifth stablecoin with a market capitalization of $1,229,836,667 and a trading volume of $132,554,436. Lunched at first for a limited investor base in January 2018, TrueUSD has since grown to incorporate almost $400 million of backed tokens as of October 2020 and is now traded on 70+ exchanges, 160+ markets, and 20+ OTC desks across 5 continents.TUSD aims to increase liquidity by providing cryptocurrency traders and general users with a nonvolatile asset in comparison to free-floating tokens like Bitcoin (BTC).
