Top 5 Stablecoins for Investment in 2022

The cryptocurrency market has a kaleidoscope of digital currencies ready for investors to profit from. Many cryptocurrencies offer smart contracts, cross-platform exchanges, and speedy transactions. 

Since the crypto market is highly volatile and susceptible to downfall, this unpredictability causes cautiousness among investors. However, there are cryptocurrencies whose value hardly fluctuates, called “stablecoins”. 

So, which stablecoins are the best investments in 2022? 

Stablecoin Explanation: What Are They?

Before we start listing the best stablecoins, check out our brief Stablecoin explanation below:

Stablecoins are cryptos tied (or correlated) to an external asset. Fiat currencies are the common denominator that binds some of the most popular stablecoins with them. For example, precious metals, USD, or even other cryptos. 

These coins also maintain a reserve of the asset they’re tied to. For instance, if an individual invests in a stablecoin tied to USD with 4 million coins in circulation, it will have its equivalent amount in cash in the bank holding the stablecoin, acting as collateral. 

When the investor decides to sell the stablecoins, its equivalent amount is taken from the total reserve. Due to these features, stablecoins are less volatile and predictable. Now that you know what stablecoins are, let’s move to the list of the most stable cryptos in 2022. 

Top Stablecoins for Investment

This list contains stablecoins sorted by market capitalization as it defines the coin’s actual value and worth. Before buying any of these coins, analyze the crypto market and the coin’s trends to make intelligent investment decisions.

1. Tether

Tether (USDT), launched in 2014, is one of the oldest stablecoins. It’s also ranked as the 3rd most valuable crypto for its huge market cap, making it one of the most stable cryptos. As of now, the market cap of Tether (USDT) is almost $68 billion. 

Tied to a 1-to-1 ratio to the USD, Tether’s value is equal to 1 USD. This coin claims to have cash reserves and equivalents to back every USDT available in the market. 

1. USDC

USDC (USD Coin) is also tied 1-to-1 to the USD value. Introduced in 2018, it is managed by Coinbase and Circle. Currently, USDC has a market cap of $48.7 billion, including it in the top 10 most valuable cryptos globally. 

USDC also claims to have cash reserves and equivalents (including US treasuries) to back every USDC circulating worldwide. 

1. BUSD

BUSD (Binance USD) was launched by Binance, the largest cryptocurrency exchange worldwide. Its market value right now is above $21 billion, making it another stable crypto. BUSD also has a value of 1-to-1 tied to USD. The best aspect of BUSD is that it has charges relatively low when bought or sold. 

1. DAI

DAI, or Dai, is unlike any other and one of the earliest stablecoins. This is because even though it is tied to USD, ether tokens back the coin. MarkerDAO introduced Dai in 2015, and according to CoinMarketCap, Dai’s market cap is more than $6.8 billion. 

1. TerraUSD

Terra offers UST or TerraUSD stablecoin. Like the others, this stablecoin is also pegged to a 1-to-1 value of USD. TerraUSD’s current circulating supply is almost $10 billion. Traders use this stablecoin to get returns with LUNA, which is Terra’s staking and governance reward token. 

To conclude 

Not all stablecoins are tied to fiat currencies. As mentioned before, stablecoins are also pegged to precious metals and other cryptocurrencies. These coins are infamous for being less volatile than cryptos like Ethereum and Bitcoin. Moreover, the stablecoins making it to the top 20 list according to their market cap rarely fluctuate in price.