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8 Common Questions About Stablecoins

During the research on stablecoins and conversations with others, several questions have continuously emerged. Now, summarizing them in a FAQ format makes this topic easier to understand.

It is important to emphasize again that stablecoins are rapidly evolving financial technology tools that are still in a very early stage, and this article strives to provide fact-based and researched information to the best of its ability.

1. Will stablecoins replace cash or bank cards?
No. Stablecoins are primarily used in the crypto space and for inter-business transactions, with a very low retail payment application rate (less than 5% of consumer transactions in 2024), and cannot currently replace cash or bank cards.

2. Why are retail giants pushing for stablecoins?
The core reason is to reduce costs and increase efficiency: stablecoin settlement fees are below 0.1%, allowing bypassing of traditional payment channels and intermediaries, making them suitable for small transactions. However, they face multiple challenges such as regulation and operations.

3. Can stablecoins replace credit card networks?
Not in the short term. Credit cards have significant advantages in terms of ubiquity (accepted by over 80 million merchants worldwide), user trust (refunds, fraud protection, etc.), and experience, which stablecoins have yet to reach.

4. Why are stablecoins “stable”?
They rely on arbitrage and redemption mechanisms: when the price deviates from $1, traders adjust supply and demand by buying low for redemption or minting to sell, prompting the price to revert. Different types of stablecoins (fiat-collateralized, crypto-collateralized, algorithmic) have varying risks.

5. Is USDT safe? What about the impact of a collapse?
There are risks; its issuance is often outside of US regulation. Although reserves are primarily in US Treasury bonds, redemption or reserve issues could trigger panic. A collapse would impact the global crypto market.

6. Can stablecoins withstand inflation?
No. They are pegged to fiat currencies and will depreciate along with the anchored currency, only able to hedge against cryptocurrency volatility, not inflation.

7. Will stablecoins replace SWIFT?
Not directly, but they can substitute some demand. SWIFT is slow and costly, while stablecoin transactions are fast, do not require intermediary banks, and are programmable, making them a reliable alternative in cross-border scenarios.

8. Are stablecoins likely to be involved in illegal uses?
The risk is relatively low: in 2023, only 0.24% of crypto transactions were linked to illegal activities, and transactions are traceable, with regulatory tools in place, making them easier to track compared to cash.

Bitcoin Price: Triangle Pattern Test

Bitcoin fell by 3.5%, breaking below $114,000 and breaching the technical support level, which may indicate a deeper correction in the future.

After Bitcoin broke below the support level of $118,859, selling intensified and downward pressure accelerated, approaching the next support level of $112,000.

BTC bears seem intent on pushing the price below the resistance level of the symmetrical triangle pattern formed since last month.

Analyze Ethereum (ETH)

Although the market previously expected altcoins to enter a period of prosperity, Bitcoin's dominance in this cycle is rising, which typically means that smaller altcoins will face difficulties.

Despite the broader altcoin market facing pressure from BTC dominance, the leading altcoin Ethereum still has an opportunity to turn the tide.

August will be a decisive month for Ethereum. If Ethereum can break through $4,000 quickly, it may trigger a strong rebound before the end of the year.

If it fails to break this resistance, the price may enter a phase of "slow decline," likely finding support in September and forming higher lows before attempting the next significant upward move.

While we all believe Ethereum will reach an all-time high this year, we must also acknowledge that it won't be a straight or easy path.

Ethereum is currently facing strong resistance around $3,950, failing to break through this resistance in recent days. This resistance has caused the price to retreat to key support levels.

Currently, Ethereum is testing the range of $3,500-$3,600; if the daily close falls below $3,500, it may further drop towards $3,200-$3,300.

#ETH

Analyze Ethereum (ETH)

Although the market previously expected altcoins to enter a period of prosperity, Bitcoin's dominance in this cycle is rising, which typically means that smaller altcoins will face difficulties.

Despite the broader altcoin market facing pressure from BTC dominance, the leading altcoin Ethereum still has an opportunity to turn the tide.

August will be a decisive month for Ethereum. If Ethereum can break through $4,000 quickly, it may trigger a strong rebound before the end of the year.

If it fails to break this resistance, the price may enter a phase of "slow decline," likely finding support in September and forming higher lows before attempting the next significant upward move.

While we all believe Ethereum will reach an all-time high this year, we must also acknowledge that it won't be a straight or easy path.

Ethereum is currently facing strong resistance around $3,950, failing to break through this resistance in recent days. This resistance has caused the price to retreat to key support levels.

Currently, Ethereum is testing the range of $3,500-$3,600; if the daily close falls below $3,500, it may further drop towards $3,200-$3,300.

#ETH

🧊 “The Coldest Meme in the Game — PENGU Isn’t Playing Anymore”

At first, it was just vibes.
A penguin with a dream.
Sliding through memecoin mayhem. 🐧❄️

But now?

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What makes PENGU different?

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This isn’t the loudest project.
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And that face?
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Penguins don’t fly... but PENGU might.
Keep watching. Or keep sliding.

$PENGU