With the ongoing bearish trend that has rendered Bitcoin and other Altcoins to go low, this event has hooked users to the edge of their seats. For some market experts who had predicted a bright future for digital coins this year, they had to recall their words.
The recent slumps started a selling craze among the investors and crypto enthusiasts alike. The slump has also resulted in most of the startups shutting-down their ventures entirely or a massive workforce cut.
In a crypto summit held by Bloomberg in London, many panelists agreed to the fact that cryptocurrencies are on a weak ground and might take time to recover from the recent slip. However, they agreed that this situation is just a roadblock and not a show stopper.
The chief investment officer of CCL Investment Management, James Bevan said,
“I don’t regard this as an existential crisis, I just regard it as a bump in the road and institutional investors have had plenty of bumps in the road in conventional currencies and transaction systems.”
Some experts believe that stable coins and smart contracts will be the key to success for cryptocurrencies in forthcoming years. The growth of stable coins made them as widely spoken as Bitcoin and has brought blockchain into the forefront.
If something positive and practical use-case for cryptocurrency should surface, it would definitely centre around stable coins. This is because these coins hold firmer support with fiat currencies and tend to be less volatile.
A stablecoin is quite simply a representation of a stable supplement asset blockchain largely used to overcome decline and volatility across general crypto prices. We have witnessed Altcoins also fluctuating and stable coins would lessen these variations.
Generally, stablecoin should be and generally are backed by real assets, such as a bank account backed one-for-one by U.S. dollars, euros, other fiat currencies, or even gold. They have no major appreciation value and only reflect the performance of the underlying asset.
They can also be used as a mechanism to transact around in stable terms and technically even for payments, although the speed of the underlying blockchain may be a limiting factor for time-sensitive transactions.
It is important to understand that stablecoins are crypto only by design to satisfy the tokenization process and ensure that no double spending takes place.
This is a broad insight into the fact that for cryptocurrency to be well appreciated by the mainstream, it must have a stable value. With the ongoing efforts, this vision is not far away!