Invest in stablecoins — DotBig guide
Are you looking for a way to transfer your savings to a blockchain-based wallet? Then, you should consider this option. Stablecoins are digital currencies backed by fiat money. Their prices track prices US Dollar, EUR, etc. Thanks to nonvolatile price rates, these cryptos are quite popular with crypto traders. Although they don’t perform such price surges as cryptos, they help to mitigate the risks related to volatility in the crypto market. That’s why people invest in them. From this guide, you will learn more about these assets.
Differences between stablecoins
We divide these assets into different categories by defining their key characteristics. The first and the most obvious feature is the fiat currency, to which the rates of one crypto coin are pinned. USD is the most popular one.
The second key characteristic to define different stablecoins types is the cash reserve, to which the cost of a digital coin is backed. Companies, which issue stablecoins, might have actual cash or cash-like reserves. If they need to issue more coins, they add a certain amount of cash-like assets in order to make them correspond to the number of coins that are going to be issued.
If we consider the total market value, it’ll become clear — the most popular cryptos from this category in 2022 are attached to USD or USD-based assets. Here are they:
- Tether (USDT)
- USD Coin (USDC)
- TerraUSD (USTC)
- Binance USD
- Dai (DAI)
Why do people buy them?
There are a few reasons why people buy stablecoin. See the following:
- Easier to exchange crypto. You can buy a certain amount of these assets to make further transfers faster. With these cryptos, there will be no need to transfer fiat money from your bank account to get other cryptocurrencies.
- DApps operating on blockchain networks allow using them as trusted payment methods.
- When putting money in such assets, you can generate passive income. Annual interest rates vary between 3% and 20%.
- Stablecoins help to decrease the impact of changing price rates in the crypto market. That’s why they are good to hold your long-term savings. This gives you confidence that your crypto assets won’t devalue unexpectedly, as often happens to other popular cryptocurrencies.
Now, when you know the benefit of investing in these assets, you may be wondering how to do this with DotBig. Actually, stablecoins are bought the same way as other cryptocurrencies.
- Create your account on the trading platform that allows trading cryptocurrencies.
- Make the minimum required deposit.
- Find your coin.
- Transfer money from your account and add any stablecoin to your wallet. Later, you will have the possibility to buy other crypto assets by using these savings.
Investing in stablecoins has the same goal as saving money in USD or other stable fiat currency. However, digital stable currencies might be more usable than fiat money. The transactions made via digital means are faster and safer. Finally, they add stability, which other cryptocurrencies cannot do.