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The Beginners Guide: What You Need to Know about Stablecoins (2019)

May 10, 2019

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The Beginners Guide: What You Need to Know about Stablecoins (2019)

Most cryptocurrencies rise and fall in value. Stablecoins are different. These crypto coins are specifically designed to maintain value in perpetuity.

Stablecoin Market Review

On this page, we’ll explain what stablecoins are, what they do, and why you may want to invest in some. We’ll start with…

What Are Stablecoins?

Stablecoins are cryptocurrencies whose prices are pegged to the price of another asset. For example, the GUSD and the USDT are both valued at exactly 1 USD (with some minor price fluctuations).

GUSD just launched on CoinCola!The mechanisms used to accomplish this vary – but the point is that these coins’ prices are stable. This is why they’re called stablecoins.

Most of these cryptocurrencies retain value perfectly because they’re pegged to fiat money. A few are pegged to other real-life assets like gold, meaning their exact price changes from one day to the next. Generally speaking, only the former are considered true stablecoins.

What do stablecoins do?

Stablecoins have several purposes. First, they let people store crypto without worrying about price fluctuations. This makes it perfect for people who want to own crypto coins for shopping, trading, and investing – but don’t want to risk price volatility.

Second, stablecoins let users transact quickly, easily, and without using fiat money. This is important because many exchanges and online stores dealing with crypto don’t accept USD and other national currencies. Transacting with them means finding and buying a USD-equivalent stablecoin.

Put simply, the average stablecoin is the digital, decentralized equivalent of the US Dollar or another fiat currency. In some cases, like with the GUSD, their value is directly linked to USD reserves stashed away in a bank account on behalf of coin owners.

 

Why should I invest in stablecoins?

Stablecoins aren’t made to rise in value. However, they can still be quite valuable if you’re a trader or investor.

6 stablecoins you should invest in 2019

The reasoning is simple. With stablecoins, you can easily buy crypto or fiat money using a variety of marketplaces and exchanges (including CoinCola). You can’t say the same for USD which you usually have to send via bank wire, PayPal, etc.

On a practical level, this means that stablecoins are a convenient way to shop and buy crypto instantly. If you own them, you can buy a cryptocurrency whose price is on the upswing while other people are trying to wire their money to an exchange. This makes stablecoins a valuable, versatile asset to invest in and own.

Moreover, stablecoins are an excellent way to retain value if the crypto market is on a general downturn. For example, selling BTC for stablecoins like USDT and GUSD when its price is dropping is a smart way to cut losses and hold on to whatever you have.

Where can you buy stablecoins?

2 of the biggest stablecoins on the market today are GUSD and USDT.

GUSD or Gemini USD is a stablecoin launched by the Winklevoss brothers’ Gemini exchange. USDT is an older stablecoin that’s been the “gold standard” for stablecoins since its inception.

You can buy both of these coins on CoinCola: our OTC marketplace and exchange. To learn more, simply go to coincola.com. We’re one of the most reputable places to buy crypto in the world, and we’d love to serve you next.

 

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About CoinCola

Founded in 2016, CoinCola is a Hong Kong based company offering both over-the-counter cryptocurrency trading and crypto-to-crypto pair trading exchange. CoinCola now serves millions of users from over 150 countries with our fast, secure, and reliable trading services. We support BTC, ETH, BCH, LTC, USDT, DASH, and XRP. Visit www.coincola.com to invest in digital assets.

Disclaimer: Trading and investing in cryptocurrencies, also called digital currencies, crypto assets, and so on) involves substantial risk of loss. All informations are used at your own risk, and any content on this site should not be relied upon as advice or construed as providing recommendation of any kind.