USDT and USDC are two types of stable coins, which are cryptocurrencies pegged to the value of a specific asset, in this case the US dollar. This means that the value of these coins is designed to remain stable, and they can be used as a way to store value or transact without the volatility often associated with other cryptocurrencies.
USDT, also known as Tether, is a stable coin issued by Tether Limited. It is intended to be pegged to the value of the US dollar, and each USDT is intended to represent one US dollar. USDT can be used to transact on crypto exchanges, and is often used as a way to transfer value between exchanges without having to convert back to fiat currency (such as dollars/euros/shekels, etc.).
USDC, on the other hand, is a stable coin issued by Centre, which is a joint venture between Circle and Coinbase. Like USDT, it is pegged to the value of the US dollar and is intended to represent one US dollar per USDC currency.
Both USDT and USDC are widely used stable coins and accepted by many exchanges and platforms in the crypto world. However, there are some differences between the two. For example, USDT is issued by a single company and is not subject to the same level of regulatory oversight as USDC, which is issued by two companies that are regulated financial institutions.
There are a number of concerns about the transparency and stability of the USDT coin, although Tether has denied any wrongdoing and claimed that it holds sufficient reserves to back up the stable coins issued.
The market value of USDT is about $66 billion as of this writing.
Compared to the market value of USDC, which stands at a market value of approximately 45 billion dollars.
Note that these two crypto giants do not exactly hold their reserves in cash, but part in cash and part in short-term US bonds.
An interesting fact: USDC reserves, for example, hold almost $38 billion in short-term US bonds compared to $8 billion in liquid cash.
At the current interest rate of the short-term American bond (about 4.6% annually) the return on such an amount is about $1.75 billion profit per year or about $145 million per month.
Overall, both USDT and USDC are useful stable coins that can be used to store value or transact on various cryptocurrency exchanges and protocols in the crypto world. However, it is important to consider the differences between the two, including their issuance and regulatory oversight, when deciding which one to use.
In addition to USDT and USDC, there are also many other but less common stable coins such as:
DAI: is a decentralized stable coin issued on the Ethereum network. It is designed to be pegged to the value of the US dollar, and its value is maintained through a process called “overcollateralization,” where users must collateralize their DAI with other cryptocurrencies in order to issue it.
BUSD: is a stable coin issued by Binance, one of the largest cryptocurrency exchanges in the world. It is pegged to the value of the US dollar and is intended to be a reliable and stable option for making transactions on the Binance platform.
PAX: is a stable coin issued by Paxos, a regulated financial institution operating in the field of cryptocurrencies. Like other stable coins, it is pegged to the value of the US dollar and is intended to be a stable and transparent option for making transactions.
There are many other stable coins in the crypto world, each with their own unique features and characteristics. Some are backed by specific assets, such as gold or silver, while others are backed by a basket of currencies or commodities. It is important to thoroughly research and compare different stable coins in order to choose the best option for our personal needs.
When it comes to investing in cryptocurrencies, the question of how much money to start with is a common question. After all, the crypto market is known for its volatility, and it's natural to want to be cautious when entering into this type of investment.
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