What is This Cryptocurrency? USD Coin
We have already discussed that there are many types of cryptocurrencies. There are specific transaction only coins, smart contract types, and also inter-operability coins. There are also stable coins which are supposed to keep a stable value. USD Coin or USDC as it is called is another type of stablecoin. With so many cryptocurrencies that have values that change in the span of a minute, USDC allows for day traders or any individual to keep the relative price of their holding the same.
Bitcoin’s price can range widely and wildly on any day. There are days where the price may be more stable, but it is difficult to know when. With prices swinging from close to 19K to 9K it is important to have another type of currency to help whenever Bitcoin’s price fluctuates. The reason for the creation of stablecoins was for this same reason. Instead of having to cash out and cash back in with fiat currencies as some exchanges do not support fiat currencies, stablecoins allow for a quick conversion from any other cryptocurrency to the stable coin in order to have a stable price.
The price of USD Coin has been stable with mild fluctuations of a cent or less. There are multiple other stable coins such as Tether and many others. USD Coin can be used on the Crypto.com exchange or Coinbase. Other cryptocurrencies have different stablecoins depending on the exchange. The value of the stablecoin is closely in sync with the dollar. The stablecoin can also hold value and may be used as a cryptocurrency to pay for transactions.
Some cryptocurrency exchanges also allow for awards to be given for holding a stable coin. Coinbase offers a certain amount of rewards for holding USD coin in the exchange for a specific amount of time. Other exchanges that are de centralized allow the use of other stable coins and may offer a similar or even larger interest rate.
Stablecoins are an innovation that has allowed for a stable hold of value. While many cryptocurrencies change in price in a manner of minutes, Stablecoins can remain stable. Day traders and hodlers know the importance of stable coins as they provide a quick method of holding the value of their portfolio.
*This does not constitute investment advice. Before you decide to invest in cryptocurrency, make sure you read and understand the projects.