Can USDC Topple Tether As The King Of Stablecoins? By DailyCoin – Investing.com

Can USDC Topple Tether As The King Of Stablecoins? By DailyCoin – Investing.com

Can USDC Topple Tether As The King Of Stablecoins?

Stablecoins grew considerably last year, breaking the $20 billion market cap. Risk-averse investors flock to these coins because of their relative safety. Tether (USDT) and Coinbase's USDC dominate the stablecoin market.

Currently, USDT makes up most of the market's supply and value, with USDC lagging in second place. However, USDC has found a promising niche in decentralized exchanges.

What does that mean? Can USDC become the favorite stablecoin for investors one day?

What do you need to know about stablecoins?

Investopedia describes stablecoins perfectly: they're crypto coins that use reserve assets to back their value. We can think about them as a combination between fiat and crypto.

As many know, fiat currencies are “technically” backed by gold or similar assets. They essentially act as statements of an individual's ownership over a country's gold reserve. These valuations allow fiat currencies to enjoy more stability than and other cryptocurrencies.

However, we must note that many currencies, like the US dollar, are no longer redeemable in gold. Does that mean stablecoins can be less volatile than fiat? Not exactly, but that's primarily because of society being used to the currencies.

Different types of stablecoins

Experts categorize stablecoins based on what backs their