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In the cryptocurrency market, stable coins are gradually occupying the leading position. While Bitcoin continues to be the biggest cryptocurrency in terms of market cap and investment trends, stable coins are in the background picking up the pace and impressive organizations and experienced big-time investors with its potential. To outsiders, cryptocurrency is all about Bitcoin's dominance, and several companies like PayPal now allowing Bitcoin transactions. But price volatility does play a strong role in determining the future of crypto coins. That said, stable coins experience way less volatility compared to cryptocurrencies like Bitcoin that is hugely famous for its price dips.
Stablecoins are cryptocurrencies that are backed and supported by an underlying asset. While they can be pegged to any fiat currency, the US dollar is a popular choice. Since 2018, stable coins have exponentially grown in the crypto space, dodging market fluctuations. Let's dive deeper and understand why stable coins are setting up to take over the reins from Bitcoin a driving force of the future.
The lower the volatility, the better its value will be. This is a major benefit associated with stable coins that attract individual and institutional interest. With Bitcoins, investors are not keen to use it as a mode of payment, owing to its bull run. They would rather use it as an investment and cash in big amounts of money (if that happens) in the long run. With stable coins, the purpose of creating cryptocurrencies will be fulfilled.
Bitcoin, blindly cannot lead the cryptocurrency market without serving a purpose. For example, we have Ethereum that is enabling DeFi, and XRP is helping banks optimize bank transfers and foreign transactions. Stablecoins are looking to develop their blockchain networks to facilitate interesting use cases. Tether, for example, boasts faster and cheaper transactions than Bitcoin.
The original purpose of Bitcoin was the create a decentralized and distributed payment system, which has not happened yet, after almost a decade of its inception. The alternate version of this purpose has emerged in stable coins. To fulfill this core purpose, crypto should be liquid, possess low volatility, and be integrated with an established financial institute. All these boxes are ticked off by stable coins.
Cryptocurrency applications and use cases continue to gradually develop in many ways that were unimaginable when Bitcoin was launched. In fact, Bitcoin cash is a cryptocurrency that was launched as a fork of Bitcoin's network as Bitcoin couldn't meet the standards and goals it set. Global payments company Visa shares a similar opinion about stable coins having the potential to lead the pack. Most of the exciting and interesting applications for cryptocurrencies and blockchain are slowly becoming dependent on stable coins. They are becoming the foundation for creative use cases as they are less volatile and backed up an established and relatively stable asset, be it the US dollar or the Euro. Sure, Bitcoin is leading in terms of price levels, investor awareness, and market attraction, but other cryptocurrencies in the market are evolving beyond chasing Bitcoin's price value on a daily basis.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
