There are some top stablecoins that every investor should know about for 2024. These coins are crucial for maintaining the stability of the cryptocurrency ecosystem, and many are set to undergo significant developments throughout the year.
These top stablecoins to watch in this article represent some of the most important names in the industry, and all market participants need to keep an eye on these names as we run up to the Bitcoin (BTC-USD) halving event that’s due to happen in April.
So here are the three top stablecoins for investors to consider.
Tether (USDT-USD)
Tether (USDT-USD) has the highest market capitalization of any stablecoin on the market, which certainly makes it one of the top stablecoins for investors to pay attention to.
Throughout 2023, Tether issued an additional 2 billion USDT to its inventory on the Ethereum (ETH-USD) and Tron (TRX-USD) blockchains, a move aimed at meeting market demand and preceding the launch of five innovative projects in 2024.
Tether added approximately $4 billion in excess reserves to its stablecoin’s consolidated reserves in 2023, thereby enhancing its stability and resilience in the volatile digital currency market. The project also plans to publish real-time reserve data in 2024.
Furthermore, the company has been actively managing its loan portfolio, with plans to reduce its stablecoin loans to zero by 2024. This decision follows a rise in secured loans in 2023, driven by short-term loan requests.
These factors then make Tether one of those top stablecoins.
USD Coin (USDC-USD)
USD Coin (USDC-USD) is one of the newer entrants to the stablecoin market, but it has a market cap of over $28 billion.
The coin is set to expand significantly, with plans to enhance its market position and bolster access across multiple blockchains. Circle, the entity behind USDC, announced its intention to introduce USDC to five new blockchains, aiming to strengthen its competitive edge.
It should be noted that Circle confidentially filed for a U.S. IPO last month, aiming to transition into a publicly traded entity. Although the specifics of the shares and pricing remain undisclosed, this move follows a previously abandoned $9 billion public merger deal in 2022.
Furthermore, Circle has taken steps to deepen USDC’s integration within the crypto ecosystem by rolling out native USDC tokens on the Ethereum layer-2 scaling protocol, Polygon (MATIC-USD). This move allows USDC to be accessible to users and developers directly on Polygon instead of needing to use Ethereum.
Dai (DAI-USD)
Dai (DAI-USD) is a decentralized stablecoin running on Ethereum that aims to keep its value as close to one U.S. dollar through the use of smart contracts. MakerDAO, a decentralized organization, operates it.
MakerDAO implemented “The Maker Constitution” last year to enhance DAI’s stability, making governance more inclusive. DAI remains the fourth-largest stablecoin, recently experiencing a brief de-pegging incident. This new measure aims to reinforce DAI’s USD peg and introduces anonymous token holder classes to combat corruption.
I feel that DAI will come more into prominence amid Binance’s announcement that its Binance USD (BUSD-USD) coin will gradually be continued by February 2024. This decision follows the cessation of the new BUSD token minting by Paxos, the issuer of BUSD, due to regulatory issues.
BUSD used to have a peak market cap of $23.49 billion, and now there’s liquidity flowing to smaller top stablecoins such as DAI, which I feel will be accretive for token-holders and the MakerDAO project at large.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
