In search of stability: Which cryptocurrency is best for savings?
Why stablecoins became popular
People are increasingly losing trust in national currencies, as many countries suffer from economic instability and inflation. Against this backdrop, stablecoins are becoming an increasingly attractive means of savings.
A telling example is the situation in Latin America, where residents are increasingly using stablecoins like USDC from Circle and USDT from Tether to maintain financial stability.
According to data from Bitso, the largest local exchange, stablecoins accounted for nearly 40% of all crypto purchases in the region in 2024. Meanwhile, Bitcoin transactions dropped to 22%.
What cryptocurrencies were bought in Latin America in 2024. Source: Bitso
As we can see, USDC is the undisputed leader. Its growing popularity is directly linked to the challenges faced by its main competitor, USDT. The latter is undergoing mass delistings from European exchanges due to the new MiCA (Markets in Crypto Assets) regulations, which require strict oversight and reporting from stablecoin issuers.
But why do people in Argentina, Brazil, Mexico, and other countries choose stablecoins for savings? To understand this, we need to examine the region’s specifics.
Why are stablecoins attractive?
Latin America is a region of developing economies, with both major, promising markets (Brazil, Mexico) and countries with severe economic instability (Venezuela, Honduras). Many citizens face rising inflation and are constantly searching for ways to protect their savings. This is why cryptocurrencies are becoming an increasingly popular option.
"In Latin America, complex macroeconomic conditions, characterized by high inflation and currency devaluation, have led to a broader adoption of cryptocurrencies—especially stablecoins—as a reliable store of value," says a Bitso report.
But why isn’t Bitcoin dominating in this market, given its reputation as a reliable store of value? One possible reason is that Latin America’s economy heavily relies on remittances from migrant workers abroad. Since Bitcoin—without using the Lightning Network—is not ideal for instant transactions, stablecoins seem like a more logical choice for both transfers and savings.
Additionally, many people fear Bitcoin’s volatility. To them, cryptocurrencies appear more as risky investment tools rather than assets for everyday use. In contrast, stablecoins seem like a more practical solution, as they are pegged to the US dollar (or another major fiat currency) and rarely experience significant price fluctuations.
A notable development is that the total market capitalization of major stablecoins recently surpassed $200 billion after US Treasury Secretary Scott Bessent pledged to use digital assets to maintain the US dollar’s status as the world’s reserve currency.
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Which cryptocurrencies can serve as a store of value?
Now, let’s return to the concept of a “store of value.” Are stablecoins the optimal solution? The short answer is no.
At first glance, stablecoins seem like a convenient tool for savings, particularly in high-inflation countries, as they are pegged to fiat currencies. However, in reality, these are all centralized projects that could be shut down or heavily regulated at any time. A prime example is USDT’s current struggles in Europe.
Moreover, stablecoins don’t provide long-term capital growth. A token pegged to the US dollar will always be dependent on the base currency and won’t appreciate in value over time.
Most popular cryptocurrencies also fail as a store of value:
- Ethereum has lost popularity in recent years and has experienced major price drops.
- XRP, though used in international transactions, remains highly volatile, making it unreliable for savings.
- Memecoins like Dogecoin are purely speculative assets, prone to extreme price swings.
If you’re looking for a truly reliable store of value, Bitcoin remains the best choice. Despite short-term fluctuations, it has consistently grown in value over the long term due to its limited supply and increasing institutional adoption.
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Bitcoin is “digital gold,” preserving and increasing value in the long run. In the coming years, its role as a reserve asset will only strengthen, especially with growing interest from governments and major financial institutions.
Meanwhile, stablecoins, while useful for cross-border transactions, will likely remain a niche financial tool rather than an optimal savings solution.
