Not All Crypto is a Roller Coaster: Understanding Stablecoins

When you hear the word "cryptocurrency," what comes to mind? For most people, it's the crazy price swings of Bitcoin or other digital currencies. One day the price is up, the next it's down. It can feel like a financial roller coaster.

But what if we told you there's a different kind of cryptocurrency, one that's designed to be boringly stable? It’s called a stablecoin, and it’s the secret ingredient that makes high-yield savings possible at Renalta.

The Problem with "Normal" Crypto

Cryptocurrencies like Bitcoin and Ethereum are known for their volatility. That's just a fancy word for big price swings. Their prices can change dramatically in a matter of hours.

This volatility is exciting for traders who want to make a quick profit, but it's terrible for everyday use. You wouldn't want to buy a coffee for $3 and have it be worth $5 by the time you finish drinking it. And you certainly wouldn't want your savings to lose 20% of their value overnight.

This is why many people are hesitant to get into crypto. The risk is just too high for things like saving for a down payment or building an emergency fund.

Stablecoins: The Calm in the Crypto Storm

Stablecoins are different. They are a special type of cryptocurrency that's designed to hold a steady value. The most common type of stablecoin is pegged to a real-world currency, like the U.S. dollar.

At Renalta, we use a stablecoin called USD Coin (USDC). One USDC is designed to always be worth one U.S. dollar. It’s that simple.

How Do Stablecoins Stay Stable?

So, how does USDC keep its value? It's not magic; it's just good, old-fashioned accounting.

For every one USDC in circulation, there is one U.S. dollar (or an equivalent asset) held in a bank account. These reserves are regularly audited by professional accounting firms to make sure the numbers add up.

This means that, unlike other cryptocurrencies whose prices are based on speculation, the value of USDC is backed by real dollars. This is a key part of why we built Renalta on this technology.

The Best of Both Worlds

Stablecoins like USDC give you the benefits of cryptocurrency without the scary volatility. You get:

• Speed: Transactions can be sent around the world in minutes, not days.
• Accessibility: You can access your money 24/7, without having to wait for a bank to open.
• Low Fees: Sending money is often much cheaper than traditional bank transfers.

And because the value is stable, you can use it for everyday financial needs, like saving and spending.

Why This Matters for Your Savings

Understanding the difference between volatile crypto and stablecoins is the first step to unlocking better returns on your savings. By using stablecoins, Renalta is able to offer a high-yield savings option that is both safe and effective.

You don't have to worry about market crashes wiping out your savings. Your money is designed to hold its value, just like it would in a traditional bank account—but with the potential to earn a much higher return.

Ready to learn more about how stablecoins can power your savings? Check out our article, Stablecoins 101: Why USDC Powers Your High-Yield Savings.