What are stablecoins?

Stablecoins are crypto assets that are mainly based on two fundamental characteristics

Being tokens and consequently digital assets, their exchanges are regularly recorded on a blockchain, exactly, as for example, happens for Bitcoin exchanges.

Their actual value is “anchored” to a certain asset or real asset, such as the dollar, the euro or precious metals such as gold, platinum, etc.

Stablecoins represent an extremely common method among traders to buy and trade virtual currencies in the cryptocurrency economy.

Most traders operating in this sector are fully aware of the high market volatility and consequently, a stable instrument is considered extremely valuable. Stablecoins are multifunctional cryptocurrencies that combine the stability of ordinary assets with the extreme flexibility of digital assets.

Bitcoin and Ethereum are cryptocurrencies that have numerous advantages, such as decentralization and the absence of intermediaries for any type of transaction. Nevertheless, cryptocurrencies have the characteristic of being extremely volatile, with unpredictable prices and extremely high market fluctuations. Although each cryptocurrency is subject to different mechanisms than the others, stablecoins have a fair resistance to market volatility, and consequently, no significant spreads will be noticed, they manage price fluctuations by tying their value to more stable assets such as currencies.

Being Binance, the most influential cryptocurrency exchange in the world, chosen by millions of users, it will be possible to invest in complete safety on the main stablecoins on the market.

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Main features of stablecoins

The stablecoins give the possibility to expose oneself to the cryptocurrency markets in a safer way, in fact, being anchored to the value of fiat currencies, they do not undergo any market variation.

Stablecoins represent a type of cryptocurrency with a more stable price than other virtual currencies such as Bitcoin, not strictly linked to the price fluctuations of the US dollar.

The market value of stablecoins is “pegged” to reserve assets such as the US dollar or gold, therefore cryptocurrencies such as Binance Stablecoin (BUSD), US Dollar Stablecoin (USDC) and Tether (USDT) are linked to the dollar US on a 1: 1 basis and their price is equivalent to 1 US dollar.

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Importance of stablecoins

Stablecoins make volatile markets more stable.

For most investors and traders who trade in the cryptocurrency market, the value of stablecoins is closely linked to the value of fiat currencies that are part of traditional markets and both derive stability from it. For example, due to the increase in volatility, traditional traders have the option of being able to choose whether to allocate a part of their portfolios to cash or alternatively to treasury, while investors who prefer investments in the cryptocurrency market will buy stablecoins. / dd>

The stablecoins, a valid alternative for quick and efficient investments in the cryptocurrency market.

Being a market with extreme volatility, traders who opt for cryptocurrency trading frequently decide to invest in stablecoins. This particular type of investment is considered extremely stable on the market and allows for quick transactions without having to wait for precious time for fiat transfers.

Stablecoins increase liquidity and trading volume in the cryptocurrency market.

The stablecoins are in fact extremely stable and efficient tools, these characteristics represent the main cause of a significant increase in investments in the cryptocurrency market. A significant increase in trading in the market determines the growth of volume and capitalization. This positively affects liquidity, making the cryptocurrency market more efficient as a result. The efficiency gains in turn allow for more accurate asset pricing, resulting in equitable asset price stability and lower bid-ask spreads.

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How to use stablecoins

Stablecoins are considered by most traders as a kind of safe haven (similar to stable ordinary instruments like gold), as the value of their tokens will not experience unpredictable swings in the foreseeable future.

Stablecoins are an excellent investment for both novice and expert traders as their value does not fluctuate too high and are high-quality assets to buy or invest.

Earning interest.

Traders who invest in stablecoins have the opportunity to earn income from interest earned on loans. Investors wishing to make a loan will be able to earn interest paid by borrowers. The staking of cryptocurrencies is an innovative mechanism that allows you to obtain rewards from the immobilization of your cryptographic assets, that is to say that by making your cryptocurrencies available, for a certain period of time, the trader has the opportunity to obtain potential gains.
Binance offers its traders a range of products to meet any financial need. Investors will be able to earn compound interest through stablecoins such as Binance Stablecoin (BUSD), Binance Wealth Management. Furthermore, through a regular investment, it will be possible to regularly purchase USDT, BUSD, etc.

Quick and easy resource transfers.

Buying and owning stablecoins does not require a bank account. Any transaction will be convenient, quick to process and low cost. Additionally, stablecoins support fast cross-border transfers, including countries where dollar circulation is almost absent or the local currency is unstable.

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Ranking of the most popular stablecoins

Stablecoins are an excellent investment to consider as a true “safe haven” in volatile markets. Below you will find a detailed list of the most popular stablecoins on the cryptocurrency market.

1. Binance Stablecoin (BUSD) with a value of $ 1.00 and a market capitalization of $ 14,441.42 million.
2. Tether (USDT) with a value of $ 1.00 and a market capitalization of $ 78,399.56 million.
3. Stablecoin USD (USDC) with a value of $ 0.99 and a market capitalization of $ 45,453.71 million.
4. TerraUSD (UST) with a value of $ 0.99 and a market capitalization of $ 10,685.48 million.
5. Dai (DAI) with a value of $ 1.15 and a market capitalization of $ 9.7 billion.
6. TrueUSD (TUSD) with a value of $ 1.00 and a market capitalization of $ 1,440.6 million

The prices listed above are current as of January 17, 2022. The ranking of stablecoins on the list has been compiled on the basis of market capitalization and should not be construed as a recommendation or endorsement by Binance for any investments.

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Channels and methods of purchasing stablecoins

With Binance, the undisputed leading crypto exchange in the industry, traders will be able to start their investments in moments, without having to waste precious time.

Binance offers a wide range of methods for buying cryptocurrencies, including top-up with fiat or using a debit / credit card.

Step 1.

Make a deposit in fiat currency. This can be done via Binance Wallet wire transfer or wire transfer, making sure to check the available fiat channels for the desired currency.

Step 2.

Purchase stablecoins via your user wallet or directly by credit / debit card.

Stablecoins are believed to be of vital importance to the cryptocurrency economy, providing traders and investors with a safe and secure medium of exchange.

To start investing with Binance, just:

1. Create an official Binance account or alternatively download the cryptocurrency trading app.
2. Proceed to verify your account.
3. After completing the verification, you can proceed with the purchase of cryptocurrencies by bank transfer, credit / debit cards or with the e-wallet option

To receive more detailed information, you can contact the support team by visiting the official website Binance.