INVESTING IN STABLECOINS: WHAT TO EXPECT IN 2021
Do you know investing in stablecoin coins can give you financial stability and security all at once? Listen and follow carefully for the best investment tips you will get in 2021 regarding a secure income.
Of course, there has been an explosion of interest, especially with cryptocurrencies. Meanwhile, lots of people do not understand the intricate dynamics of investing with these coins. As a result, they lose loads of cash daily.
This article fixes the problems you face when it comes to investing in stablecoins.
From a technical standpoint
Let us look at this from a technical standpoint. Since you want to invest in cryptocurrencies, here is a question for you.
Do you trade-invest stablecoins? The answer to this question should be negative because you don’t trade-invest these coins. This is because stablecoins themselves cannot offer you high returns. Volatile cryptocurrencies like Bitcoin are where trading investments can be made.
Meanwhile, there is no need to get discouraged because Investing in stablecoins has helped many crypto traders. Finding out its benefits and turning them into opportunities remain the next action.
Related: WHAT IS A STABLECOIN?
Furthermore, the popularity of stablecoins seems to be massively increasing. While comparing one of the popular stablecoins, “Tether,” to the most popular cryptocurrency, “Bitcoin,” see what we found. The analysis shows that the largest stablecoin, “Tether,” trades more volumes than Bitcoin. This happens daily, and as I speak, trades are ongoing.
The secret behind this success is the major benefits investing in stablecoin offers to traders.
These three points below summarize the benefits.
BENEFITS OF INVESTING IN STABLECOINS
- Swift and benefiting transfer mechanism
- Balanced prices
- High-interest rates to investors
Now let’s take a careful look at these listed points.
Swift And Benefiting Transfer Mechanism
The growing popularity stablecoins have gained can be attributed to how swift transactions are carried out. Having not only made it a good investment platform, but it also becomes a popular value-transfer system across the crypto ecosystem.
You will find out that in January 2020, six top stablecoins surpassed the Ethereum network in the transfer of values. These stablecoins were(USDC, GUSD, USDT, DAI, PAX).
Investing in stablecoin is beneficial, especially when it is now on record that it has started challenging FX providers. Venmo is a testimony to this fact, as well as many other FX providers. Records have it that the quarterly growth rate of stablecoins was 300% compared to Venmo’s 23% in the 2017 year.
These facts point to the clear truth that stablecoins could replace most traditional payment providers in the nearest future. With the look of events, it will grow beyond a trading tool into a means of payment.
THE LATEST STABLECOIN
With the cryptocurrency explosion at the tail end of 2017, stablecoins gained a great deal of popularity. Most especially the USD-backed tether stablecoin. As a result, the rate of people investing in stablecoins also increased.
Lots of crypto traders saw this asset as equipment to hedge risky prices. This was during the period when many cryptocurrencies including bitcoin faced wild volatility. The need to invest in stablecoins was now the only way out of the box.
During that period, there was an outstanding growth for most stablecoins, especially Tether. Tether stablecoin also experienced a 130x increase by the end of 2017. comparing with historical gains, Tethers previous $10 million during early 2017 spiked to $1.3bn during year-end.
Seeing the massive explosion, most stablecoins followed the success trend. Among these stablecoins are PAX, TUSD, USDC, and DAI. Other narrowed exchange stablecoins also joined the trail. An example is the Binance USD(BUSD).
One powerful feature of most of these stablecoins is the similar fiat currency backing them up. It has also been observed that the United States of America Dollar is the backbone for lots of these fast advancing stablecoins. This is the secret behind the stability of these coins.
Crypto merchants chose USD mostly because it is universally considered as the reserve currency known to the world. The USD is also required for most international exchanges in the world. This has made most crypto traders express confidence while using tokens backed by the USD as trading cash. In like manner, while investing in stablecoins, it will be nice to consider USD-backed coins for double security.
HIGH-INTEREST RATES TO INVESTORS
For individuals who wish to make loads of cash from their stablecoins, platforms are available for such. Some of these platforms are also loan providers who are willing to pay interest for invested capital. Some of these platforms include Nexo and Celsius Networks.
These USD-based stablecoins are accepted and Lent out to borrowers, Just like Banks and most financial institutions do. Borrowers also pay the fixed, predetermined interest rates. This also provides revenue for investors on the platform.
While investing in stablecoins through this means, you are sure of higher interest rates over traditional interest rates local Banks provide. For some platforms, interest rates exceed 6%, while in some cases, it is more. For instance, investing in margin lending funds can fetch over 20% interest rates. These benefits so far come only while investing in stablecoins.
It is important to check out the reviews of platforms before investing. This will help you stay away from scammers and fraudsters.
Do you have questions on this topic?
Go down to the comment section and post for clarifications.