Stablecoins are a bridge. A bridge enables you to cross something because you want to be on the other side (where Bitcoin lives).
A bridge is useless if there is no reason to be on the other side.
In this case, the cryptoverse is on the other side, and many traditional investors want to be there, but high-risk volatility (the fear of losing money by investing in Bitcoin) keeps them away.
“The reason is simple: Stablecoins are the bridge between cryptocurrencies and traditional finance. Without stablecoins, crypto applications have to wrestle with volatility, and volatility makes financial contracts expensive.”
Harvard Business Review
Stablecoins represent the bridge that allows these investors to set foot in the cryptoverse.
(Bitcoin and Ethereum Exchange Traded Funds [ETF] offer the same bridge, but this story focuses on stablecoins)
“Stablecoins have emerged as an effective tool to hedge this massive volatility, with a simple premise that allowed traders a seamless crypto pair into a fiat pegged cryptocurrency.”
3iQ Digital Asset Management
This means (among other things) that Stablecoins play a vital role in the mainstream adoption of the Cryptoverse.
I say Cryptoverse because of the diverse offerings provided — to learn more: (This defines the cryptoverse)
The upcoming U.S. presidential election will be critical in the mainstream adoption of the Cryptoverse.
A pro-crypto president will help propel the Cryptoverse forward, while an anti- or neutral crypto president signals four more years of investment volatility.
This is where Stablecoins will shine.
A pro-crypto presidency may make the bridge a superhighway, but an anti-crypto presidency may reveal more Stablecoin bridges.
Addressing Stablecoin concerns
The first bridge occurred before the Cryptoverse evolved beyond Bitcoin and altcoins (any coin that is not Bitcoin).
It happened in 2014, thanks to the innovative thinking of Charles Hoskinson and Dan Larimer. It appeared on the Bitshare Blockchain and launched as BitUSD.
The fiat currency peg was an idea before its time, but it lost its 1-to-1 peg in 2018. Today, it trades for around .83 (when you can find a platform offering it).
Tether also launched in 2014, finding its niche as the bridge traditional investors needed. Today, it has a total market capitalization of over $119B.
2018 Terra Luna launched, becoming the third-largest Stablecoin by market capitalization.
Its 2022 crash rocked the financial world, as $50B in value was lost in days, souring traditional investors’ views on cryptocurrency.
Liquidity issues were created as selloffs became a “run-on-the-bank” as frightened investors scrambled to save their investments by pulling out.
As one bridge crashed and burned, others held strong. After all, the Cryptoverse is an intriguing place with compelling investment opportunities.
In 2024, Stablecoins (part of the Cryptoverse) will have a total market capitalization of over $173B.
Investors want to go into the Cryptoverse, and Stablecoins is the bridge.
Circle, a global financial technology firm that uses cryptocurrency for payments, made history when it became the first global Stablecoin issuer to secure an Electronic Money Institution license.
Circle’s license is important because it opens the Cryptoverse to 27 nations (around 450 million people) through the Stablecoin bridge.
Mainstream adoption only happens when widespread acceptance and usage of cryptocurrency are used among the general population.
The Cryptoverse has yet to arrive, but its multifaceted components (like Stablecoins) continue to reach the general population.
Why is it important?
The license is a prerequisite to doing business in crypto in the European Union under the Markets in Crypto Assets regulatory framework.
Circle’s license is important because it opens the Cryptoverse to 27 nations (around 450 million people) through the Stablecoin bridge.
Mainstream adoption only happens when widespread acceptance and usage of cryptocurrency are used among the general population.
The Cryptoverse has yet to arrive, but its multifaceted components (like Stablecoins) continue to reach the general population.
Are Stablecoins for you?
They are if you consider yourself a conservative investor.
They are if you want to grow your net worth and are unhappy with the current investment options.
They are if you are curious about the Cryptoverse but have yet to be ready to jump in.
According to BuiltIn, these are the Top stablecoins to know in 2024.
- Tether (USDT)
- USD Coin (USDC)
- Dai (DAI)
- First Digital USD (FDUSD)
- Ethena USDe (USDE)
- PayPal USD (PYUSD)
- TrueUSD (TUSD)
- Frax (FRAX)
This isn’t an endorsement but rather a tool to help you in your educational pursuit of financial freedom.
How it impacts everyday people
Bitcoin, Stablecoins, and the Cryptoverse are moving towards mainstream adoption and will impact humanity. This means the change that is coming will affect you.
It will take work and a willingness to change, but once it is embraced, it will help everyday people find a better life.
It is not the holy grail of independent wealth but can (and should) be part of the strategy.
It is part of the future global economic landscape and must be something you are familiar with.
Education is critical, and intelligent investing is paramount for everyday people to navigate these bumpy roads.
The thought of change often scares everyday people back into old, comfortable living patterns. There is nothing comfortable about being uncomfortable.
However, IF change is to occur, you must weigh the length of your uncomfortableness against the lifetime of enjoyment.
In other words, is it worth the temporary discomfort to avoid a lifetime of complacency and lack?
If your answer is YES, you can follow along and learn how to make a change by being educated in the cryptoverse.
I am committed to the cryptoverse, which offers a path to help you change and find financial freedom.
I’m not a financial planner, so I don’t offer financial advice. I am an avid student of the cryptoverse who is willing to make the things I learn available to everyday people eager to take a chance, change, and explore their financial freedom in the cryptoverse.
crypto, cryptocurrency, cryptoverrse was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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