0:58
beginner
June 13, 2022
back to overview

what is a stablecoin?

Cryptocurrencies are highly volatile, meaning that their value could change exponentially in just a short period of time. Therefore, it is not as easy to purchase using volatile currencies as it might result in huge losses.

Stablecoins offer the solution to this by pegging their value to fiat currencies. Because their prices are fixed to a reserve asset like the US dollar or gold, stablecoins serve as a link between cryptocurrency and daily fiat currency. Compared to Bitcoin (BTC), this significantly minimises volatility, resulting in a kind of digital money better suited to everything from everyday business to cross-exchange transactions. Stablecoins like USD Coin (USDC) have attracted billions of dollars in worth as they have become one of the most popular ways to store and transfer value in the crypto ecosystem.

The purposes of stablecoins are to provide crypto that could maintain stability while sustaining the advantages of blockchain technology. Cryptocurrencies like BTC and Ethereum (ETH) have much volatility, sometimes even by the minute. Buyers and sellers can have confidence that the value of their tokens will neither grow nor fall unpredictably in the near future if the asset is linked to a more stable currency. Stablecoins do not require a bank account to hold, and they are simple to move. Stablecoins can be easily transmitted worldwide, particularly to regions where the US dollar is difficult to come by or where the local currency is volatile.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

what is a stablecoin?

Cryptocurrencies are highly volatile, meaning that their value could change exponentially in just a short period of time. Therefore, it is not as easy to purchase using volatile currencies as it might result in huge losses.

Stablecoins offer the solution to this by pegging their value to fiat currencies. Because their prices are fixed to a reserve asset like the US dollar or gold, stablecoins serve as a link between cryptocurrency and daily fiat currency. Compared to Bitcoin (BTC), this significantly minimises volatility, resulting in a kind of digital money better suited to everything from everyday business to cross-exchange transactions. Stablecoins like USD Coin (USDC) have attracted billions of dollars in worth as they have become one of the most popular ways to store and transfer value in the crypto ecosystem.

The purposes of stablecoins are to provide crypto that could maintain stability while sustaining the advantages of blockchain technology. Cryptocurrencies like BTC and Ethereum (ETH) have much volatility, sometimes even by the minute. Buyers and sellers can have confidence that the value of their tokens will neither grow nor fall unpredictably in the near future if the asset is linked to a more stable currency. Stablecoins do not require a bank account to hold, and they are simple to move. Stablecoins can be easily transmitted worldwide, particularly to regions where the US dollar is difficult to come by or where the local currency is volatile.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

back to overview
previous article

there are no older articles

next article

there are no new articles

novice
3:30
is bitcoin the future of money in developing countries?
beginner
2:45
common bitcoin scams and how to avoid them
novice
4:15
what is dogecoin?
expert
4:50
bitcoin as a store of value
expert
5:00
what is cardano?
expert
5:00
what is XRP?
novice
3:00
is it worth getting paid in bitcoin for your services?
novice
4:15
how long is a bear market?
novice
4:45
the June 2022 crash - what it means for bitcoin’s future
novice
4:00
what is ethereum 2.0?
beginner
1:00
what is etherscan and how to use it
beginner
1:30
what is a ponzi scheme?
novice
1:40
what are DApps?
expert
1:45
what is BAYC?
novice
1:35
what is a memecoin?
beginner
1:00
what is a cryptocurrency wallet?
novice
1:30
what are the different types of tokens?
beginner
1:05
what is the difference between a ‘coin’ and a ‘token’?
beginner
0:55
what is a node?
novice
1:10
what is day trading?
novice
1:15
what is swing trading?
beginner
0:55
how to pay taxes on your crypto gains
novice
1:20
what is an IEO/ICO/IDO?
novice
1:30
how crypto gains value
beginner
0:50
what is a fiat digital wallet? And how to create one.
novice
1:10
what is staking?
novice
4:51
what is a DAO?
beginner
1:01
what is the $MXXR token?
novice
1:19
what are peer-to-peer payments?
beginner
1:02
what is the difference between total supply and circulating supply?
expert
1:12
what happens to bitcoin after all 21 million are mined?
novice
0:58
how does bitcoin work?
novice
1:12
what are gas fees?
novice
1:00
what is a smart contract?
beginner
0:49
what is dollar cost averaging?
novice
3:06
what is web3?
beginner
0:47
what is passive income?
novice
0:52
what is leverage trading?
expert
4:12
which is better, proof of work or proof of stake?
beginner
0:53
how do i read candlestick charts?
novice
4:26
what are the advantages and disadvantages of CEXs and DEXs?
beginner
0:43
what to consider when choosing a crypto exchange
novice
0:51
what makes a coin deflationary?
novice
4:58
what are the advantages and disadvantages of the metaverse?
beginner
0:59
what is technical analysis?
beginner
5:02
what is maxxer?
expert
0:52
what is ethereum?
novice
4:14
what is social trading?
expert
1:11
what is the difference between CEXs and DEXs?
novice
5:07
is crypto the future?
beginner
1:09
what is the difference between a bull market and a bear market?
beginner
2:48
how to start investing in crypto easy?
beginner
1:03
what is fiat currency?
beginner
0:58
what is a stablecoin?
beginner
0:54
what is the metaverse?
beginner
0:59
what is an altcoin?
expert
0:55
what is the difference between proof of work and proof of stake?
beginner
0:52
is bitcoin safe?
beginner
1:19
what is bitcoin mining?
novice
1:06
what is bitcoin?
beginner
1:25
how do i buy crypto?
novice
1:24
what is decentralisation, and why is it a good thing?
novice
0:53
what are NFTs?
beginner
1:24
why is crypto becoming bigger?
novice
1:22
what is the blockchain?
back to overview
beginner
0:58
June 13, 2022
get the latest news
We compile the most exciting updates into a newsletter for you, things are moving fast, you don't want to miss out!
sign up now
enter the beta today
Join the first community driven crypto exchange with social trading at its core.
create account

stay up to date
with maxxer

subscribed
‍succesfully!

subscribed
‍succesfully!

error icon
Oops.. looks like there's something
wrong with your information.

stay up to date
with maxxer

subscribed
‍succesfully!

subscribed
‍succesfully!

error icon
Oops.. looks like there's something
wrong with your information.

stay up to date with maxxer

subscribed
succesfully!

error icon
Oops.. looks like there's something
wrong with your information.