Bitcoin Forum

This might seem like a stupid question But.

I've been wondering whats the benefits of a Stable-coin?

I haven't seen any places where you can pay with lets say Tether - so what makes people "invest" in this coin?

From my point of view the only rational reason to invest in Tether - is to trade for other Cryptocurencies. But then again i might've missed something  ;D

Enlighten me

It's something that can be used as a hedge against the volatility of bitcoin and the cryptocurrency markets in general.

You guessed it right. It's mostly only for trading; not as an "investment"(obviously, they're just going to be $1) as no one "invests" in USD anyway :P. Especially if you're anticipating a crash in the price of a certain cryptocurrency; you would sell that coin/token for certain stablecoins to sort of "protect" your investments, so you could use those stablecoins to buy back lower, or to buy other cryptocurrencies.

Stable coins is not used for investing. Most of the time it is used for the following purpose (adding more point):

- To mitigate risk from volatile assets without complex scenario. In other words, you can save profits without liquidating your assets to fiat.
- Use for payment, because it's stable merchants can avoid risk (lower risk than accepting Bitcoin for example)
- Investment in ICO. Team can accept stable coin and avoid volatility risk if the token sale goes for months. For example, if they accept ETH (worth $100 at the start of token sale but then decreased to $10) they only get a small amount of money, but this can be avoided if they accept stable coins like USDT.
- Avoid fiat/regulatory requirements to purchase crypto. Using stable coins can give you instant access to almost any crypto market without doing any KYC. Though it also depends on what exchange that you use.

Consider stablecoins as fiat currency on the blockchain the only main benefits of stablecoins is having the ability to take advantage of fiat currency (convert your coins to fiat to avoid volatility) while still operating on the blockchain the rest benefits are just bonuses and wasn't the main intention of the creation of stablecoins in the first place.

Example USDC (Stablecoins) is USD on blockchain. Meaning with stablecoins you can use USD on the blockchain.

Stablecoins can be useful when it comes to huge cross-border transactions. Most financial transactions are small and therefore cost nothing but large movements in money are inefficient and cost alot. This is one potential usage of stablecoins.

But in the world of crypto generally, they are useful for limiting your exposure to volatility at points and to maintain a level of value based on a chosen fiat currency.

Hope this helps :)

A stable coin is mandatory for the cryptocurrency market, as cryptocurrency trading takes place on an international scale.
For example, if you fix the profit of cryptocurrencies to the dollar, then in relation to other world Fiat currencies with the dollar exchange rate you can be a loser.
Therefore, we need a fixed stable currency that will avoid risks in trading operations.

It is mostly being used between the exchanges.

They are centralized and they are not to be trusted for the long term.

Use case example:

You want to transfer $100k from "exchange A" to "exchange B". While you can already use BTC or any other crypto you like between those exchanges, there might be some unwanted volatility during the transaction completion. The chances are lower lately than what it used to be but it is still there.

Other than this one I don't really see any other use cases. I mean some people use it against BTC/Crypto as an hedge but it doesn't make much sense. If the Authorities decide to end Bitfinex tomorrow, you can say goodbye to your USDt. (this applies to other stablecoins as well) Unlike the USD balance on your exchange, all the people around the world who use USDT will get affected by it.

It has its advantages but I believe the disadvantages are weighting more.

When the day comes and people realize you don't need to get back to FIAT at all while you are on crypto, they are going to disappear on their own.

There was a thread sometime that they were discussing USDT can be sent on myetherwallet. I can't believe it at first but I guess some of them had done it before. It still make sense if of course to hedge funds and wait til the bear finally slowdown. I haven't tried it myself but if you can send tether to another exchange then it could also be done to send it to a desktop wallet.

I am not interested in stable coins until now, because for me it cannot produce a clear profit. In trading it is difficult to make a profit. Maybe it is only suitable for long-term investment. Thank you!

Stable coins aren't really an "investment" in itself.
Instead, they are useful tools to manage your other crypto investments.

since the value of basically all crypto is based off of bitcoin, price volatility is huge.
Often, you will find that even if you make trades when a coin is pumping, you aren't actually making any money.
That's because the sell price is in btc, not in actual usd.

Confusing?
So lets say you buy 1 altcoin for 1 btc.
The altcoin cost you $4000, (about the price of btc now).
So actually, it isn't worth $4000, your altcoin is worth 1 btc and that btc is worth $4000.
Then, a week later, you see on coinmarket cap that your alt pumped 10% and is now worth $4400.
You get hyped and you sell it, but the problem is it is still going for 1 btc.
The value of your alt didn't go up, just the value of btc which made it look like your alt went up in price.

Stable coins are meant to detach all of this from btc and instead allow you to trade with something pegged to the USD.

Stablecoins are only good for payments and as a hedge against crypto market but then again crypto market concept is against fiat and controlled currencies so im sure not many like the fiat backed stablecoins among the crypto community including me but it is available in the market and can be used for the points i wrote about earlier so yes they can be useful in many situations but personally i always feel safe in holding btc and eth no matter how much price collapses as im a long term holder.

Now there is two of us.
I do not get it too if you invest with those kind of coins.

One good usage of it is just an escape pod for trading. That is to escape the dump that will happen then go back with the same USD that you withdrew from bitcoin to USD.
Afterwards you will be back on buying bitcoin with a higher number.
That is all the reason behind it. There are just too many traders by now.

As the name implies stability. It may not be that popular on a wider scale, but if I were to want to make a direct transaction and I want to avoid losing some of the total assets through volatility, I could choose to go with a stable currency.

what's the point of investing in Tether? This is the same as investing a dollar in a dollar. makes no sense.

If you look at the daily volume, you can see that the volume is many times higher than the market cap. It is not used as investment and is only used for short time for people who need stable coin.

Stablecoin as the name implies is a cryptocurrency whose value is fixed, in most cases to $1. The stablecoin is not held in anticipation of increasing value as the value is fixed by nature, its utilized to serve as a hedge against the volatility or fluctuations of the market. It ensures that the cryptocurrency held doesn't diminish in value.

Tether use omni blockchain and while myether is focusing on ethereum blockchain, if you send tether there like you are wasting your money because it's not compatible with the blockchain that synched with MEW wallet.

As far as I know, stable coin is not for investment. It has multiple uses. It is just for trading and it gives an opportunities for crypto investors to secure their investments as stable coins are always stable. There will not be any instability of stable coin. I have bought such stable coins which secured my investment during the market meltdown. So I think this is the benefit of stable coin.

They dont invest but rather trading a stable coin between any crypto is somehow a part of your trading plans on where you do switch your
coins to stable ones to prevent volatility or certain situation on the crypto you are trading on.We know that anytime it can dump and you decide to
convert it to stable coins.

nbody ever uses stable coins for something like that because the costs of transferring money that way is going to be so much bigger than doing it through regular methods because of the fees and also there are a lot of risks involved with this method.

what you may be referring to is "transferring money between exchanges". for example for arbitrage traders who want to buy bitcoin on another exchange with fiat but transferring fiat from exchange 1 to 2 costs a lot.

Stablecoin is the new order in the cryptocurrency space. Due to the volatility of the market, most persons are looking for a redemption. Stablecoin assures its holders that the value of the tokens will never be lesser than $1, this is very useful for traders who don't want to have their resources depleted, so they convert to stablecoin when the market is bearish.

You won't get any dividends from investing in stable coin. For me it is just another way of how to stay out of the market.  If there is a rally I prefer to stay out and selling my cryptos for stable coins and when things are getting better, buy more altcoins.

You will have no chance to buy back your altcoin again, imagine crypto can go to the moon instantly, when it was going to the moon and you will need more fresh money and that means if you must put more money to buy back your portfolios again.

Asides transaction uses, the best utility of stable coins which I often use is to hedge it against btc and ethereum volatilities after trade. It saves investors from risks and provide an excellent mitigation option during crypto to crypto conversion

it is important to apply this hedging in time. only very experienced traders have time to move to stablecoins

Stablecoin is a coin specifically created as a high anti-volatility crypto. Stablecoin crypto has stable characteristics, making it suitable for use as a value storage unit, especially in the short or medium term.

Behind the creation of the Stablecoin crypto is to provide the benefits of cryptocurrency with the stability of the USD volatility equivalent

Not all stable coins are safe and worth keeping your money in them. I personally think that at the moment it is better to keep money in Bitcoin

Stablecoin is also a crypto currency designed to weaken the volatility of volatile values, relative to some assets or a set of "stable" assets. Stablecoin can be pegged to currency, or to exchange useful money, such as precious metals or industrial metals. Stablecoin that is supported by a currency or supported is approved to be centralized, while those who use other crypto currencies are referred to as decentralization. Stablecoin which is supported by Fiat can be traded on the exchange and can be exchanged from the publisher. Stable maintenance costs are like supporting reserve storage prices and reserve prices, license support, auditors, and business infrastructure needed by regulators.