Crypto Industry Predicts Bright Future for Stablecoins

The last quarter of 2018 was devastating for the cryptocurrency market, but this has opened an opportunity for stablecoins and their development. All over the world investors are exchanging the past crypto leaders – Bitcoin and Ethereum for stablecoins to protect their funds and exit the situation with minimalized losses.

The stablecoin industry became famous after this year’s market crash when the majority of leading cryptocurrencies dramatically lost from 80% to 90% of their value. In order to prevent critical losses, investors started exchanging the volatile crypto assets for stablecoins with the intent to redeem them with digital or fiat currencies.

Why Investors Choose Stablecoins?

Eliminating the well-known crypto price swings, stablecoins, as is clear from their name, can offer stable price and prevent the uncertainty among investors. For example, users can purchase a stablecoin for $10 and redeem it later for the same amount. At the end of the year, stablecoins are the fastest growing sector of the market that currently worth $186 billion. The crypto organizations realized their potential which has lead to the releasing of more than 120 stablecoin projects during 2018.

Stablecoin Projects

Three main categories determinate the stablecoins: fully collateralized, partially collateralized, and uncollateralized. The cryptos that fall in the third category are designed to increase and decrease supply the same way as banks buy and sell their debt to stabilize purchasing power. Some of the new crypto projects have attractive features that allow them to freeze or delete coins in order to tackle money laundering acts.

The stablecoins that are currently popular on the market are lead by Tether which faces intense competition with Maker, Paxos, TrueUSD, and Gemini Dollar.

What About the Future?

The majority of the crypto society believes that 2019 is going to be the year of stablecoins. Analysts and advocates forecast that in a long-term, a significant percentage of the traditional industries would want to integrate a stablecoin solution. Insurance and lending  are just some of the sectors that will take advantage of these cryptocurrencies.

Facebook as a social media leader already announced that it would release a stablecoin to power P2P payments on one of its family members – WhatsApp.