Cryptocurrencies are volatile in nature. The crypto-ecosystem is a volatile place with many ups and downs associated with the pricing. With the stock market fluctuating at uneven intervals, some investors must have stability. To solve the conundrum, attract new investors and have a firm base crypto-sphere filled with a new digital asset, Stable Coin. If you are looking to expand your base or build a knowledge foundation in the crypto ecosystem, read on to find more.
What’s a stable coin?
Previously, initial investors did not have the luxury to turn around their cryptocurrency whenever they liked it at a stable price. The market fluctuation rendered them immobile and stuck. These investors wanted something more out of the digital assets. Something that would serve to be an equivalent to fiat currencies like the Dollar or AED. These coins had to have stability and not lose their value over time. It had to be more like the opportunity to convert Bitcoin Profits to an AED-like value and then have the option to either withdraw it or invest it someplace else.
Why do you need stable coins?
The world of crypto is not statistical like the fiat stock market. It’s a bustling street, awake 24/7 and 7 days a week. Around the clock, your portfolio gets affected based on the pricing and fluctuation of cryptocurrency. Stable coins give investors and traders a sense of relief as you can easily choose to “cash-out” whenever you want. That means no more waiting for tedious bank processing time.
Stable coins also allow you to have the “freedom” to have a cash-like system at the back of your hand. That would mean that you can choose to buy crypto without depending on your bank’s server in the blink of a moment. It’s easy to root access with no momentary lapse.
Some critics have observed that the rise in the crypto market and the attraction is large because of stable coins. Crypto is a free market, and there’s always fierce competition. The emergence of the concept of stable coins allowed for an array to choose from with the basic need fulfilled – stability of value.
How exactly do stable coins work?
Stable Coins are backed by various systems that determine their non-volatile value. These systems can be fiat, another cryptocurrency, precious metal and algorithmic functions. The backing source of a stable coin determines its risk function. A coin backed by fiat currency is safer because it has a centralized regulating body like a bank to mitigate the risk. On the other hand, if it is backed up by Bitcoin, then that ensues drastic quick changes.
Which stable coin to buy locally in the UAE?
After going through the basics of stable coins and what they bring to the table, if you are ready, let’s dive in. So now you must wonder which stable coins you can buy, especially in the UAE.
Tether is a focused trade currency based on the wide array of challenges it faces compared to its whole market. In 2014, Tether was launched as RealCoin and is by far the most popular stable coin in the UAE. One Tether is said to be equivalent to one dollar, and its value depends on the claimed dollar reserves. If you are in the cryptocurrency hub and want to buy USDT in Dubai, you should be aware of USDT price. How it’s fluctuating and which point would be the best for you to get in.
USD coin (USDC)
Launched in 2018, the USD coin is available to be brought to the UAE. The founding member of the coin was Coinbase. USD coin is equipped with regulatory compliances adding to its safety.
Binance USD (BUSD)
Launched in 2019 and audited monthly, Binance USD is limited by the acclaimed value of dollar reserves. Its founding member is Binance which allows users to convert crypto/fiat to BUSD at zero fees. Also, if you use the Defi service, you can earn extra!
Limited by its collaterals stored within the vault, Dai is another stable coin you can buy in the UAE. It is available for trade in the UAE, but it is limited by Defi protocol services. The collaterals are not US dollars; rather, these are other cryptocurrencies.
Best Pair for long term investment
Stable coins are cryptos that have been pegged to US Dollars or any other crypto or metal. These give you the stability to exchange and agility to trade. Amongst an array of choices, you need to choose a suitable pair for a long term investment. One such pair is BTC/USDT. USDT is Tether which is connected to USD, as previously mentioned. What you can do is buy USDT with USD and enjoy sweet trades from a safe base. USDT is considered the most popular; hence it is the most stable pair investment for 2022.