The cryptocurrency market is highly volatile in nature and unpredictable. No one imposes his planning on it to get the desired results. You cannot ignore the volatile effect to stay in the market but you can overcome the nature of volatility by taking some measures.
Bitcoins and altcoins are sources of volatility. Their prices are fluctuating continuously on a demand and supply basis. With the help of this demand and supply, you can buy and sell altcoins or bitcoins to get a profit margin. But it’s not easy as its looks.
You adopt multiple methods and trading techniques to overcome the volatile effect and bypass all the conditions that can hurt you and your investment. You can take into action, the day or swing technique to earn some desired results but despite that, they are not totally ignorable.
Investors and traders are reluctant to invest in the volatile cryptocurrency. So that’s why stablecoins come into existence. In stablecoins, the UDSC price and USDT price are equal to physical one dollar. It is equal to a ratio of 1 USDC price = 1 US dollar.
The volatile crypto coins have fluctuation in their price while stablecoins have nominal fluctuation in their price in other words it’s almost equal to zero. People are encouraging and taking an interest to keep the dollar in digital form in the crypto market. They also want to take the exposure to the crypto market but without any type of risk, that is available in the form of a stablecoin.
Investors and traders are very intelligent to keep their dollars in the form of cryptocurrency in the online market rather than the physical market. In the physical market, cash handling is very difficult to manage despite that, your digital dollar is managed by just simple clicks.
There are multiple types of stablecoins that are backed by different opportunities. The backing system makes them stable in such type of volatile market. Even at the time of a slump, the stablecoin does not fluctuate while the other currencies crash and strike to earth.
Cash-based stablecoins
The stablecoins that are backed with cash like the US dollar great Britain pound and Euro are called cash-based stablecoins. These cryptocurrencies fluctuate as these physical currencies fluctuate in the real world but they are in miners. The reason to backed stablecoin with this crypto is that the people have built their trust on these physical currencies and they do not want to lose them.
Commodity based stablecoins
The coins that are backed by commodities like gold, real estate, and metal and oil are called commodity-based stablecoins. In most of them, gold is widely used to back any cryptocurrency. The company has reserves of gold equal to the coins that are issued in the crypto market.
Algorithm based stablecoins
These coins are developed and operated by very talented and technical developers. They use the algorithm for the stableness of coins. This algorithm work on the base of demand and supply. When the price of that coin going to decrease it means that the supply of coins is more than it needed so the algorithm starts its work and buys the extra coins from the market to stabilize its price. Furthermore, when the price is going high, it means that the demand for that coin is increased and the supply is low. So the algorithm does its job and increases the supply of the coin in the market to stabilize the price of the stablecoin.
Kucoin provides all these types of stablecoin at their exchange. Kucoin encourages investors to save their investment in stablecoins. These stablecoins have got their place on the kucoin front dashboard. You can easily invest and withdraw in the stablecoin on the kucoin platform.
Here is the list of the top five stablecoins that are best to invest in the crypto market.
- Tether USDT
- USDP
- USDC
- Binance USD
- Dai (DAI)
Conclusively this list saves you a lot of time to research about top 5 stablecoins in the cryptocurrency market. These stablecoins are part of the cryptocurrency and build a trust level on the investors by backing the huge number of assets whether they are in cash form or commodity form.
