What Is A Stablecoin? – Stablecoins Explained
A stablecoin is a cryptocurrency asset, but it’s not the typical kind you’re used to. While most cryptos – such as Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Ripple, Chainlink, Stellar, etc. – are investment-grade assets that can appreciate dramatically in value and make you very wealthy over the long term, stablecoins aren’t used for investing per se.
So why use stablecoins? Quite simply, they’re used to facilitate things like crypto “day trading” and “swing trading.” They play a critical role in active crypto investing, but they never fluctuate in value. Many stablecoins are pegged to fiat currencies – in this case, the US dollar – at a 1:1 ratio. In other words, USD Coin is a crypto asset that’s always worth exactly one dollar.
Other stable coins can be tied 1:1 to the live market prices of other fiat currencies (i.e. GBP, CAD, Euro, etc.), precious metals, or even commodities more commonly traded on the stock market. For many investors, stablecoins are a way to have crypto holdings without much of the risk associated with the volatility of the crypto market.
Given the growth of stablecoins, there is a growing number of these altcoin options. BitUSD (BITUSD) was the first stablecoin, launching in 2014. However, the first truly successful stablecoin was Tether (USDT), and it remains one of the most prominent options. Many online betting sites accept Tether, though not all do. And lately, the stablecoin of choice has actually been USD Coin.
Still, for an up-to-date list of top stablecoins, you have the following options (though only USDC and – to a lesser degree – Tether are currently supported at reputable online sportsbooks). These are the top 10 stablecoins as of 2021, rated by current market cap:
- Tether (USDT)
- USD Coin (USDC)
- Binance USD (BUSD)
- Dai (DAI)
- TerraUSD (TerraUSD)
- TrueUSD (TUSD)
- Paxos Standard (PAX)
- HUSD (HUSD)
- Neutrino USD (USDN)
- Reserve Rights (RSR)
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