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Understanding Stablecoins, Low-Risk Crypto Assets

By Venu Goud , in CRYPTOCURRENCY , at February 13, 2023 Tags: ,

Understanding Stablecoins, Low-Risk Crypto Assets

Stablecoin is a cryptocurrency whose price is stable because its value is pegged to fiat money, gold, and other cryptocurrency reserve funds.

Understanding Stablecoins

The crypto ecosystem continues to develop with the emergence of the latest innovations that will benefit the digital financial industry. One of these innovations is Stablecoin, one of the adoptions of crypto assets and web3.

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Stablecoin is a cryptocurrency whose price is stable because its value is pegged to fiat money, gold, and other cryptocurrency reserve funds. Stablecoins exist because investment in crypto assets has quite high volatility with long-term and short-term theoretical values.

This innovation is fresh air for investors who want to own crypto assets but move stably. For some cryptocurrency traders, stablecoins can even function as a lifeboat for a quick getaway when they want to hedge their crypto portfolio without having to cash it into fiat money.

“Stablecoins tend to have lower volatility due to price because their value is based on conventional assets, such as a combination of currencies, gold, silver, or other valuable assets. For this reason, stablecoins are often the top choice for financial decisions of institutional and retail users of crypto assets,” said Ajaib Kripto Financial Expert Panji Yudha in a statement Friday (3/2).

According to CoinMarketCap, there are currently 134 stablecoins, with the top three stablecoins, namely, USDT, USDC, and BUSD, representing more than 90% of the total Stablecoin market capitalization (US$127 billion). The two stablecoins that investors are most interested in are USDT and USDC because their values ​​are based on US dollars with a ratio of 1:1.

USDT and USDC are the most popular stablecoins in the crypto asset market. Each unit of Stablecoin Crypto Asset in circulation is backed by a US$1 held in reserve in the form of a mix of cash and short-term US Treasury bonds.

“UDST and USDC are the most widely used crypto asset pairings on various world crypto exchanges. This makes it easier for investors to carry out asset transactions on the Stablecoin network with USDT and USDC pairings,” Panji said.

He gave an example, and investors can buy Bitcoin (BTC) crypto assets using USDT supplies to be paired into BTC/USDT. The existence of Stablecoin innovation has also contributed to increasing investor confidence in crypto assets.

The Commodity Futures Trading Regulatory Agency (Bappebti) recorded 5.46 million new users of crypto assets in 2022. So that now there are 16.7 million crypto asset investors in the country.

Currently, Stablecoin transactions can be done through the Magic Crypto platform, which provides USDT and USDC. Interestingly, investors can also buy and sell USDT and USDC at Ajaib Crypto with a 0% transaction fee. 

The Magic Crypto application also provides Send and Receive Crypto Asset features, including USDT and USDC Stablecoins, from other platforms such as digital wallets or other crypto exchanges.