Stable Coins vs. Bitcoin: The Real Crypto Killer App

Good morning, CryptoDents. How are you doing this fine morning? I’m doing great. I came across a post on X from Altcoin Buzz that stated, “Stable coins are the real crypto killer app, not Bitcoin.” This is quite true. Bitcoin was created for people to use as money, but it’s not being used that way. Instead, Bitcoin is being hoarded like digital gold. In this sense, stable coins have surpassed Bitcoin. People often say you can’t make money with stable coins, but that’s not entirely true. While you can’t make money by hoarding stable coins, you can make money using them.

Consider Ethereum, BNB, Solana, Tron, and Polygon. What do these blockchains have in common? They are the ones with the most stable coin activity. All blockchains charge fees for transactions, which makes them more valuable. To profit from stable coins, invest in blockchains with high stable coin activity, as this is growing rapidly. These top blockchains are dominating various narratives, including tokenization and stable coins, and are performing well across different areas.

Bitcoin’s Evolution and Stable Coins’ Role

Bitcoin was originally designed as a peer-to-peer electronic cash network for cheap, fast, and censorship-resistant payments. However, it evolved into a form of digital gold and is not as fast as newer blockchains. Bitcoin is volatile, unlike stable coins, which represent real dollars and offer price stability. Stable coins are fast and efficient for payments and settlements, filling the gap left by Bitcoin’s volatility.

Stable coins processed roughly $9 trillion in the first half of last year alone, and this year the figure is likely higher. A report indicated that stable coins are processing more on-chain payments than traditional bank transfers. Annualized, stable coin payments are in the multi-trillion dollar range, which is remarkable given that most people don’t use crypto. Stable coins are widely used for payments and remittances, with cross-border flows reaching $1.4 trillion. In regions like Latin America, 71% of stable coin usage is for payments, allowing countries with unstable currencies to use the dollar through stable coins.

The Impact of Stable Coins on the Dollar

Stable coins act as a synthetic dollar, providing a stable currency for countries with weak currencies. They serve as a base currency for crypto markets and are essential for DeFi settlement, lending, automated market makers, and derivatives. Stable coins are becoming a global shadow dollar system. This is beneficial for the dollar and the U.S., as it maintains the dollar’s status as a reserve currency, supporting the American standard of living.

Top Blockchains for Stable Coin Activity

Ethereum is the number one blockchain, holding 65-70% of all stable coin supply and processing $1.2 trillion in transaction volume. Despite high fees during congestion, Ethereum remains a high-value settlement layer for DeFi institutions. Tron, although not a popular blockchain for building projects, excels in stable coin transfers with low fees and a massive transaction volume of $3.3 trillion. It is a dominant chain for payments and remittances.

Other notable blockchains include Solana, BNB Chain, and Polygon. Solana and BNB each have $13 billion in stable coins. Polygon, although ranked lower, is gaining traction with tokenization and other developments. It is very cheap compared to its potential value, making it an attractive investment. Arbitrum and Base, along with other layer 2 solutions, are also seeing increased stable coin use.

To profit from stable coins, consider investing in these blockchains rather than the stable coins themselves, as their price remains stable. This is not financial advice, so do your own research. However, blockchains like Polygon offer significant growth potential. Have a great day, enjoy life, and I’ll see you tomorrow.