Meme Coins vs Stablecoins: Volatility and Utility

The key differences between memecoins and stablecoins in the cryptocurrency domain.

A meme coin is a word used in the cryptocurrency world to refer to well-liked currencies that have ardent online supporters and traders and are occasionally portrayed with humorous or animated memes. Meme coins may be entertaining, but they are also extremely hazardous investments that may or may not have any real value. This group includes currencies like Shiba Inu, Dogecoin, and others that may be more entertaining than practical. Understanding the dangers is essential while purchasing or trading meme coins so that you can steer clear of unforeseen volatility and losses. Meme coins are a type of cryptocurrency that has an enthusiastic online community that supports its development. They can occasionally be recognized by memes of animated animals or characters. Dogecoin and Shiba Inu were among the top cryptocurrencies to achieve meme coin status during the most recent cryptocurrency boom. Little-known currencies like Baby Doge and Dogelon Mars are included in this list. Baby Doge and Dogelon Mars still have market capitalizations in the nine figures despite receiving less media attention.

More than 300 currencies are included in the Meme Coin section of the cryptocurrency website CoinMarketCap. Many, however, are not traded frequently and are hence worthless. Only Dogecoin, Shiba Inu, Dogelon Mars, and Baby Dogecoin have a daily trade volume of more than $1 million in the meme currency category. All of them are often regarded as volatile and dangerous trading assets. While ether is necessary for Ethereum blockchain transactions, the majority of meme currencies are just useful for trade and collecting. Other meme currencies are really tokens that operate on a different blockchain rather than actual currency. Shiba Inu, for instance, is an ERC-20 token that runs on the Ethereum network. Meme coins have been referred to as complex pump-and-dump operations by some in the media and investment community. Investors should be extremely cautious when entering these markets as a result of this claim and should be aware of meme currencies.

Due to the fact that the values of stablecoins are tied to a reserve asset like the US dollar or gold, they serve as a bridge between the worlds of cryptocurrencies and conventional fiat money. In comparison to something like Bitcoin, this significantly lowers volatility and produces a type of digital currency that is more suited for everything from daily business to conducting payments across exchanges. The notion of combining the permanence of conventional assets with the flexibility of digital assets has proven to be quite attractive. Stablecoins like USD Coin (USDC), which are some of the most widely used means of storing and exchanging value in the crypto ecosystem, have seen value flow into the billions of dollars. Cryptocurrencies like Bitcoin and Ether experience significant volatility, sometimes on a minute-by-minute basis. A more stable asset can provide buyers and sellers with the assurance that the value of their tokens won't grow or fall sharply in the foreseeable future. For instance, the USDC stablecoin is supported by assets denominated in dollars that have at least equal fair value to the USDC and are held in segregated accounts with US-licensed financial institutions. These accounts are publicly verified and attested to by a reputable independent accounting company. The Ethereum blockchain is now used by USDC, along with many other stablecoins. While retaining some of the most potent characteristics of non-pegged cryptocurrencies, stablecoins are immune from their volatility. Stablecoins are open, universal, and always available to anybody online. They communicate quickly, inexpensively, and securely. They can be programmed and are digitally native to the Internet.

Stablecoins are simple to retain and transfer, and they don't require a bank account. The value of stablecoins may be readily transferred around the world, especially to locations where the U.S. dollar may be difficult to find or if the local currency is unstable. On a stablecoin investment, there are simple ways to get returns (usually higher than what a bank would pay). With transfer fees of under a dollar, users have sent USDC valued up to one million dollars. Stablecoins like USDC are a fantastic option for sending money anywhere in the globe because of their quick processing times and cheap transaction costs.