2024 is shaping up to be an exciting year for cryptocurrency investors. After exhibiting a bearish trend for most of 2023, the cryptocurrency market has seen a resurgence in interest and activity. As the market grows, investors are keen on finding stable cryptocurrencies that will provide long-term growth and security.
This guide will explore some of the most stable cryptocurrencies in 2024.
Criteria for Stability
Cryptocurrencies have a reputation for volatility, which elicits a pessimistic investor sentiment. For instance, Bitcoin moved from $68,789 in November 2021 — a record high then — to $46,164 by December of the same year and below $20,000 a year later.
To avoid such colossal price swings, investors should look for cryptocurrencies exhibiting the following characteristics:
High Market Capitalization
Cryptocurrencies with a large market cap have a more extensive user base and higher liquidity. This makes them more resilient to price fluctuations.
Real-World Use Cases
If a digital asset has real-world applications, its value is more likely to be driven by actual demand rather than mere speculation, significantly contributing to volatility.
Strong Fundamentals
Strong fundamentals, such as backing fiat currencies or other cryptocurrencies, partnerships with established companies, or a reliable blockchain infrastructure, can contribute to price stability. Other strong fundamentals include a clear and well-defined development roadmap, strong leadership, and a dedicated community.
Decentralization
Cryptocurrencies with a decentralized structure are less susceptible to manipulation and government interference and, thus, more resilient to volatility.
The following cryptocurrencies have one or more of these features, rendering them the most stable cryptocurrencies in 2024:
Tether (USDT)
Tether is a popular stablecoin that pegs its value to the U.S. dollar. For every unit of USDT, an equivalent amount of USD is held in reserve. Simply put, 1 USDT is always worth $1.
The backing of the U.S. dollar makes it a preferred choice for investors looking to hedge against volatility. However, Tether (USDT) faces criticism over the transparency of its reserves, raising skepticism about its stability.
This has sparked scrutiny in recent years; In 2019, the New York Attorney General initiated an investigation into Tether and Bitfinex, Tether’s sister company, for allegedly using USDT reserves to cover up an $850 million loss.
An agreement was reached in 2021, with the two companies paying a settlement of $18.5 million. Despite the concerns, Tether (USDT) remains one of the most widely used stablecoins, with a market capitalization of over $100 billion as of March 2024.
USD Coin (USDC)
USDC is a dollar-pegged ERC-20 token operating on the Ethereum Blockchain and accessible through DeFi applications. It is the second-largest stablecoin by market cap, with over $29 billion as of March 2024.
This coin is also backed and managed by a consortium of major cryptocurrency companies, including Coinbase, Circle, and Binance, ensuring it is fully collateralized.
USD reserves are held in bank accounts that are audited monthly and posted publicly by Grant Thornton LLP. The transparency makes it a more dependable alternative to Tether.
As such, USDC is widely used in DeFi and other applications as a bridge between traditional financial systems and the decentralized blockchain ecosystem.
Dai
Unlike USDT and USDC, Dai is backed by Ethereum. It was launched in 2017 by MakerDAO to facilitate decentralized lending and borrowing.
Dai’s value is maintained through an algorithmic process of collateralization, where users lock up their Ethereum as collateral to mint Dai. This ensures that every unit of Dai is backed by an equivalent amount of Ethereum, so it is soft-pegged to the value of $1.
Its stability is also maintained through smart contracts that manipulate interest rates to maintain a demand/supply equilibrium. If the value deviates from its peg, the interest rates adjust to incentivize users to mint or burn Dai and stabilize its value.
Binance USD (BUSD)
Binance USD (BUSD) was launched in 2019 following a partnership between the parent company and Paxos. The cryptocurrency is backed by the U.S. dollar, with Paxos holding the reserves in FDIC-insured accounts at a rate of 1 BUSD for every 1 USD.
The backing by Binance, Paxos, and TrustToken makes it a reliable stablecoin. BUSD has a strong adoption rate in DeFi and exchanges and a wide variety of use cases, including investing, trading, and buying goods and services.
This makes it a top contender for the most stable cryptocurrency in 2024. Also, BUSD is fully regulated by the New York State Department of Financial Services (NYDFS). This provides a high level of assurance to investors looking for security and stability.
Buy and Sell the Most Stable Cryptocurrencies Safely With CoinMover
CoinMover’s crypto ATM network lets users buy and sell stablecoins easily and safely. Its crypto ATMs are conveniently located throughout the U.S. and support popular stablecoins such as Tether, USDC, Dai, and BUSD.
Visit a CoinMover ATM near you today to securely transact stablecoins and other popular cryptocurrencies.