Apart from crypto tokens like Bitcoin and altcoins, the digital currency market also offers stablecoins. These are currencies that have their value connected to a stable reserve asset. That’s usually a fiat currency like USD, but it can be another commodity, or a regulated algorithm could manage the stablecoin issuance.
Stablecoins offer the necessary stability in the volatile crypto market. If an investor notices that the market or the currency they own is going through a rough patch, they can buy USDT or other stablecoins. These provide the necessary stability, ensuring the investor protects its profits despite the current crypto market’s volatility levels.
What are the best stablecoins to acquire in 2024 and beyond? Check out the list below for our top suggestions.
- USDT (Tether)
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If we look at market capitalization, USDT is the biggest stablecoin out there. Its cap is over $97 billion.
Tether actually has several stablecoins pegged to different fiat currencies and gold. USDT maintains a connection with the US dollar. The idea is simple — the coin always maintains a $1 value, and you can always trade it at that rate.
USDT is present on 14 different networks. The majority of coins are on Tron, with 51 million. Ethereum is close to 44 million, and Solana has 1.88 billion. Other networks, including Omni, Avalanche, Cosmos, EOS, and others, have less than a billion USDT. Make sure to check the best crypto wallets to find a suitable option to store USDT.
J.R. Willet is the founder of Tether. Its roots go back to 2014, but it was in 2015 when traders began using Tether for liquidity. Tether promises that each crypto coin has a 1:1 backing in fiat USD. The official website offers independent auditor reports and a graph of reserves breakdown.
These show that cash is around 84% of all reserves, with corporate bonds, precious metals, BTC, and secured loans being the rest. You can even find the breakdown of cash and other short-term deposits. Although it’s not ideal, it should be enough to confirm Tether’s legitimacy. It is the most popular stablecoin, so it’s probably your safest investment option in this category.
- USDC (USD Coin)
USDC is the second on the stablecoin list, with its value rarely varying from $1 but dropping to $0.99 at some points. It works similarly to USDT, considering that it has a 1:1 ratio of reserves in US dollars. The creators promise that the reserves are kept in leading financial institutions, which secures maximum liquidity. You can find monthly transparency and issuance reports provided by independent accountants.
The company behind USD Coins is Circle. Although the business’ history goes back to 2013, USDC entered the market in 2018. Sean Neville and Jeremy Allaire are the founders of Circle. The company received huge investments in the first several years, including support from the Goldman Sachs corporation.
USDC is primarily a token available on Ethereum. However, it also supports many other blockchains, ranging from Solana and Avalanche to Tron and Polygon. Circle partnered with Visa in 2021, which was a massive step in the USD Coin’s development as a payment option. Worldpay, MoneyGram, and Stripe are among other reputable partners.
The company promises USD Coin to be a great solution for individuals and businesses. It’s also suitable for developers, considering that it’s possible to integrate the token into apps on different chains.
- BUSD (Binance USD)
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Binance is a famous crypto exchange, and the company also issued a stablecoin in 2019. Although it has big plans, it doesn’t seem that the coin has met the platform’s expectations. Today, BUSD has a market cap of less than $85 million, placing it out of the top ten stability tokens in the market.
A partial reason for that is the controversy that occurred in February 2023. Paxos, the coin’s issuer and Binance’s partner at the time, entered legal problems. The New York Department of Financial Services started investigating it for selling the coin as an unregistered security. Paxos was ordered to stop minting the coin.
Despite those problems, Binance USD is an option worth considering. That’s because the company behind it has a huge reputation, which is why the token manages to maintain the value close to $1. As you could guess from the name, BUSD is pegged to the US dollar.
BUSD is available on the Ethereum blockchain, as well as on the BNB Chain. The latter is the official chain of Binance, and that’s where the company issues the token.
- DAI
Rune Christensen launched DAI in 2014, and this stablecoin is different from the others mentioned in our list. Unlike other stability tokens that are private projects, an open-source protocol is behind DAI. The Maker Protocol exists on the Ethereum blockchain.
The currency’s name derives from the Chinese language. It’s a specific character whose translation is to “ensure capital for a loan or to lend.”
DAI has the so-called soft peg in US dollars. The collateral isn’t in fiat currency but rather in crypto assets regulated by smart contracts. An autonomous protocol ensures that no authority can alter the network. The protocol governs everything, which should secure maximum transparency and efficiency.
The stablecoin maintained a surprisingly stable value over the years. It was at the start of the pandemic that it had certain problems since a deflationary spiral led to trading DAI for as much as $1.11. Today, we could say the token’s value is stable.
Conclusion
Stablecoins can be an important asset for crypto investors, especially during turbulent times. Let’s say you don’t want to leave the market but need to trade the currencies you own. There isn’t a good standard crypto option, so you decide on stability tokens. They preserve your funds until the time is right for another trade.
The market has multiple reputable tokens, and you can’t go wrong with the ones on our list. Pick your favorite based on your preference and don’t hesitate to use stablecoins to your advantage!
