Stability: Stablecoins are designed to maintain a stable value, typically pegged to a fiat currency like the US dollar. This stability makes them useful as a store of value and medium of exchange, unlike more volatile cryptocurrencies like Bitcoin.
Liquidity and trading volume: Tether in particular has a much larger trading and liquidity volume compared to other stablecoins like USDC. Tether's daily trading volume is around $60 billion, about 10 times higher than USDC's $6 billion. This high liquidity makes Tether attractive for traders and investors.
Regulatory compliance and transparency: While Tether has faced some controversy, USDC is considered one of the best stablecoins due to its commitment to transparency and regulatory compliance. Circle, the issuer of USDC, publishes monthly attestation reports verifying its reserves.
Utility in crypto ecosystem: Stablecoins provide a stable on-ramp for investors to access cryptocurrency markets and decentralized finance (DeFi) platforms. They enable fast, low-cost global transfers compared to traditional banking.
Demand for dollar-denominated assets: As the US dollar is the dominant global currency, there is high demand for dollar-pegged stablecoins to facilitate international trade and commerce.
In summary, the stability, liquidity, regulatory compliance, and utility of stablecoins like USDT and USDC make them popular investment vehicles for both retail and institutional crypto investors. The search results highlight Tether's dominance in trading volume but also note USDC's advantages in transparency.
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