Top 10 stablecoins for investors in 2023
Investing in the volatility of cryptocurrencies is one way to profit from blockchain assets, but stablecoins offer a different avenue. Rather than volatility, stablecoins have asset-backed values that offer plenty of cross-border uses.
Stablecoins are great sources of passive income because of loans and investments while also being a great store of value or mode of payment. While there are as many of these assets trying to join the mainstream market, there are only a few worth noting. Here are 10 top stablecoins of 2023 you can consider investing on:
1. Tether (USDT)
The United States dollar (USD) is the most popular fiat currency used among stablecoins, and Tether was among the first to do it when it launched in 2014. Thus, they set the standard for how a 1:1 USD-pegged digital asset works in the crypto market.
The perk of being the first is that it has a major market lead even against other popular stablecoins. Tether’s popularity boasts a big advantage to its users, as you can see:
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Huge support from various crypto exchanges makes it the most liquid digital asset you can invest in.
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USDT is readily offered in almost any online business that accepts crypto. The asset is also at the forefront of stablecoin betting in online sportsbooks like Sportsbet.io.
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USDT is the centre of attention in the stablecoin industry, making it the focus of all regulations.
The only issue most people have over Tether is its transparency of owned assets. Its asset is centralised under iFinex Inc, unlike most decentralised and transparent crypto. The company reported that all assets backing the digital asset are in their bank reserves, ready to be exchanged for your USDT upon withdrawal.
2. True USD (TUSD)
Just like Tether, True USD is a 1:1 stablecoin pegged to the USD. This is handled by the TrustToken platform, which launched the asset in 2018. They have partnered with trust companies, including Alliance Trust Company and Prime Trust to escrow accounts holding TUSD collateral. This way, multiple accounts back the asset, unlike USDT, which one organisation handles.
TUSD is already in the top 50 cryptocurrencies by market capitalisation in many exchanges. While it still doesn’t hold a candle to USDT’s level of adoption, it still has plenty of applications thanks to being an ERC20 token. It can be liquidated on Ethereum (ETH)’s decentralised exchanges like Uniswap and Pancake Swap.
3. Binance USD (BUSD)
Binance is one of the leading crypto exchange platforms in the world so it’s no surprise that its Binance USD would have one of the most highly-anticipated launches in 2019. The assets are backed by reserves held in segregated, bankruptcy-remote accounts. Thus, there are multiple accounts holding the reserves for BUSD, just like TUSD, and they hold monthly holdings reports.
What makes BUSD appealing is its direct ties with the Binance exchange. It can be used to hedge against market volatility to protect your holdings or lend them. Despite being closely tied with Binance by brand, BUSD is also available for trading and lending at other centralised and decentralised exchanges.
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4. Dai (DAI)
DAI is also pegged to the USD but works differently from the three stablecoins above. This asset is backed by cryptocurrencies, specifically ERC20 tokens circulating the Ethereum network. DAI is developed and regulated by MakerDAO, but it’s a fully decentralised stablecoin.
Holders of DAI can yearn for interests for as long as they have assets deposited, but it can also be used for staking the funds for a limited time. It is also the stablecoin recommended for beginner money lenders because Ethereum has impressive tools for ERC20 borrowing.
5. USD Coin (USDC)
While Tether is considered among the first major stablecoin brands, Coinbase and Circle followed closely by launching USD Coin in 2018. Their main appeal is improved trustworthiness through a consortium to manage its assets called Centre. They release monthly reports issued by the accounting firm Grant Thornton, LLP regarding the actual funds reserved for USDC.
USDC has exactly the same functionality and market influences as Tether but with a different system for transparency. However, it hasn’t quite met its competitor’s level of adoption because it’s not as prominently supported by as many crypto casinos or bookmakers. That said, USDC remains one of the top cryptos in any market's list of major stablecoins.
6. Decentralized USD (USDD)
Departing from Ethereum a bit comes a semi-algorithmic stablecoin in the form of Decentralized USD. It debuted on Tron (TRX) in 2022, backed by TRON DAO Reserve. The proposition for its development is that it’s over-collateralised, among other mechanisms. It’s still backed by a diversified portfolio of assets, including Bitcoin (BTC) and USD Coin (USDC).
However, its value remains pegged to the USD by a smart contract on the Tron network, adapting its supply/demand curve to the value of its reserves. Algorithm-backing has a lot of users concerned as Terra Luna, one of the major stablecoins, collapsed in May 2022. That concern is what made developers and backers so protective of the USDD.
7. Magic Internet Money (MIM)
MIM is the lesser-known stablecoin brand on this list because it’s not as highly marketed as its peers. It’s mostly known for its highly specific purpose of handling loans between lenders and borrowers on the platform called Abracadabra Money. This launched in 2021 and is backed with interest-bearing tokens (ibTKNS).
MIM is handy among its users because the Abracadabra protocol that powers it isn’t beholden to a single network. It can interact with users and projects built on the following blockchains, giving it one of the widest interactivity among cryptocurrencies:
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Ethereum
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Fantom
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Binance Smart Chain
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Avalanche
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8. Reserve Rights (RSV)
The RSV stablecoin is fully backed by dollars, but it follows an algorithm to maintain its supply by demand. It took a while for it to maintain its 1:1 scale with the USD since it launched the Reserve Protocol in 2020. However, it finally reached and maintained its status as pegged to the USD from 2021 to 2023.
The main use of the RSV is to allow users to trade or exchange any digital asset that can interact with the Reserve Protocol without fees. Thus, it helps cross-border businesses and conversion rates more cost-efficiently than banks.
9. Neutrino USD (USDN)
All of the recommended stablecoin brands above are valued for their stable market price and high adoption. However, Neutrino USD is an outlier because it’s quite volatile to some degree. It is officially a crypto-backed, algorithmic stablecoin but it can occasionally lose its peg. The USDN has reached a $0.05 all-time low, but traders see this as a buy-in opportunity.
Unlike the disastrous Terra Luna, the USDN shows no signs of collapsing. Instead, it is bound to rubber band upwards, even reaching an all-time high of $2.74. It is not as volatile as Ethereum, but its higher volatility compared to Dogecoin (DOGE) makes USDN a popular asset for buy and sell practices.
10. Pax Gold (PAXG)
Completing this list is the top stablecoin recommended for investors, Pax Gold. It is a stablecoin backed by gold because one asset is 1:1 a troy ounce of gold bar from London Bullion Market Association (LBMA)-accredited gold bars. That means one PAXG is equal to $1,924.66.
This asset is currently the only gold stablecoin you can use to redeem for the same gold bars or its direct equivalent in USD at the gold market. Besides that, PAXG is popular for staking and trading among crypto investors at an institutional level.
What makes stablecoins such great investments?
Stablecoins are valued precisely for the expectations they set on the market. The more consistent they are in their price range relative to their pegged asset, the better. After buying any stablecoin, users can apply them in various profitable ventures like money lending, staking, and liquidating other digital assets.
Even if you don’t use the best stablecoins as an investment, they still work great for international banking. It lets you transfer money between accounts in different countries and continents thanks to P2P, made possible only by cryptocurrencies. All you need is to join a network carrying any asset from the list of stablecoins above to start using them.
FAQ
Asking the right questions is what can help you learn more about stablecoins but check out these ones first before you inquire:
What are the top stablecoins?
The top stablecoins include the following assets:
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Tether (USDT)
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Binance USD (BUSD)
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USD Coin (USDC)
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Pax Gold (PAXG)
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Dai (DAI)
These are selected because they are the most widely adopted stablecoin brands in the market. There are others worth noting, but these are the safest investments for any trader.
What is the best stablecoin?
The title for the ‘best stablecoin’ is currently between Tether (USDT) and USD Coin (USDC). Both are regarded as the top because of liquidity rate and market capitalisation.
What is the most popular stablecoin?
The most popular is bar none Tether (USDT). It has the highest adoption among stablecoins, including sportsbooks and online casinos, while also having the best support from exchanges.
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