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Stablecoins are an incredibly interesting asset in the crypto market in recent years. While cryptocurrencies at the beginning wanted to deliver a refined option to FIAT currencies through the blockchain and wanted to liberate themselves from their rates, stablecoins were later created, which mapped the rates of FIAT currencies. In this article, we will talk about the top 3 Stablecoins in 2022.
What are Stablecoins?
Stablecoins are cryptocurrencies that are founded on the blockchain but are connected to the real value of a FIAT currency or other asset outside of the crypto world. These can be fiat currencies like US dollars, euros, or the British pound. Yet, these can also be special metals such as gold or other assets.
So if a stablecoin is pegged to the USD, then the value of that stablecoin is equivalent to the value of one US dollar at any given time. This indicates that stablecoins are “unchanging” in the sense that they adapt their value to the FIAT currency. Yet, they are of course subject to instabilities in the value of this FIAT currency, for instance, due to inflation or deflation.
Top 3 Stablecoins: Tether (USDT)
USDT Weekly Market Cap: TradingView
Tether was initially pitched as an actual coin in 2014. It is the most extensive and well-known stablecoin on the market. Tether has a market cap of more than $72 billion, making it the third largest cryptocurrency. It is available on more than 400 crypto exchanges.
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Despite its exceptional functionality and position as a market leader, USDT has lately come under fire as the company has continually refused investigations and had to pay penalties for illicit activities in the US. Despite these hardships, USDT has functioned excellently as a stablecoin since its launch. Tether tokens are assembled on numerous blockchains—delivering effortless integration and adoption. Backed blockchains are Bitcoin (Omni & Liquid protocol), Ethereum, TRON, EOS, Algorand, Solana, OMG Network, and Bitcoin Cash (SLP).
Top 3 Stablecoins: USD Coin (USDC)
USDC Weekly Market Cap: TradingView
The USD coin was launched by the Coinbase exchange in 2018. USDC is the second-most extensive stablecoin. It has a market cap of $54 billion. This puts USDC in 4th place after Tether at Coinmarketcap. The USDC is available on more than 300 exchanges and functions broadly with financial establishments and regulators. Unlike Tether, monthly audits take place at the USDC.
Top 3 Stablecoins: Binance USD (BUSD)
BUSD Weekly: TradingView
After Coinbase launched USD Coin, the world’s largest crypto exchange Binance followed shortly in 2019 when it established its stablecoin. The market capitalization is 18 billion US dollars. This puts BUSD on number 12 on Coinmarketcap. BUSD is only available on more than 100 exchanges.
With the Binance Coin (BNB), Binance has already built the fourth-largest cryptocurrency by market capitalization. Its own stablecoin Binance USD is one of the 3 most extensive stablecoins in 2022 and among the leading 12 of all cryptocurrencies by market capitalization. The BUSD is now carried by almost all major crypto exchanges. At Binance, it delivers the benefit of not charging any fees.
Is Stablecoin a Good Investment?
As stablecoins have a “steady” price, they are commonly regarded as the securest form of investment among cryptocurrencies. Yet, as an investor, you should understand that stablecoins are generally favorably centralized and likened to “true” cryptocurrencies, which are fully decentralized. Tether, USD Coin, and Binance USD are all completely owned by their parent organizations.
The financial institutions that issue stablecoins get authority and money equivalent to regular banks, but without having to obey the standard rules in the traditional financial market. In recent years, the market capitalization of all coins has grown massively in a short time. As these types of cryptocurrencies become more and more active in conventional financial markets, buzzes for more regulation are getting noisier. They are also more powerless in a financial crash.
People can purchase stablecoins if they want to dive into the cryptocurrency world but are scared of the lofty volatility first or want to get to understand the processes first. Nevertheless, of course, they do not fetch any income, since their value is steady against the US dollar.
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