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USD Coin is a prominent stablecoin in the cryptocurrency market. Providing a plethora of use cases to both crypto and traditional investors, financial services and traders, USD Coin sits among the top 10 biggest cryptocurrencies by market capitalisation.

In this article, we explore this celebrated stablecoin and all it has to offer in terms of being a traditional investment opportunity, savings relief and digital value settlement service.

USD Coin is relatively new to the market, launching in September 2018. The stablecoin is pegged to the US dollar, meaning that its value will always reflect the price of the dollar on a 1:1 ratio.

This is established by keeping an equivalent amount of the circulating supply in a reserve account, i.e. for every 1 USDC in circulation, $1 needs to be held in reserve. The reserve is a mixture of cash and short-term U.S. Treasury bonds.

What Is The Point Of The USD Coin?

Built on top of the Ethereum network, USDC is a tokenised version of the US dollar that can operate over the internet and public blockchains. It is designed to provide a stable digital currency in an industry prone to volatility.

Setting itself apart in an increasingly saturated stablecoin market, USD Coin has received wide interest due to it providing a strong layer of transparency. The platform maintains strict protocols to ensure that the reserves are always at the correct levels, ensuring holders that they can withdraw 1 USDC for $1 at any given time, by way of enlisting a major accounting firm.

All USD holdings are required to be reported regularly by USDC issuers, which are in turn published by Grant Thornton LLP (as witnessed in the news). Unlike Bitcoin, while the company uses the decentralized network of Ethereum to function, it has a centralized agency controlling it.

Who Created USD Coin?

The coin was created by the Centre Consortium, a foundation consisting of the peer-to-peer payment service company, Circle and cryptocurrency exchange, Coinbase. Circle and Coinbase were the first commercial industry users of the stablecoin.

In 2020, Circle and Coinbase announced an upgrade to the USDC protocol and smart contracts. These upgrades were implemented to increase the cryptocurrency's usability for everyday payments, commerce and peer-to-peer transactions.

Both companies are well-funded and have achieved regulatory compliance, confirming the cryptocurrency's stability and international transparency appeal.

How Does USD Coin Work?

USD Coins are created through a process of minting. Users send USD to the USDC issuer's bank account, which then uses the USDC smart contract to create the equivalent amount of USDC. The digital currencies are then delivered to the user, with the fiat payment held in reserve.

Should the user wish to liquidate their USDC, they can send a request to the USDC issuer who then sends a request to the USDC smart contract to take a certain amount of USDC out of circulation. The issuer then sends the equivalent amount of USD (minus fees) to the user's bank account, taken from the reserve.

USD Coins can be traded through exchanges for other cryptocurrencies, or sent to crypto wallets around the world (provided that they support ERC-20 tokens). The coins are also often used to hedge against cryptocurrencies going through turbulent or crashing market periods.

What Is USDC?

USDC is a fiat-collateralised ERC-20 token hosted on the Ethereum blockchain platform. The stablecoin has an unlimited total supply with currently just under 37 billion USDC in circulation.

The coin provides an easy means of transferring funds internationally at a fraction of the cost and time that sending the traditional fiat would take. It has also proven to be a popular innovation in the DeFi (decentralized finance) space.

How Can I Buy USDC?

If you're looking to add USDC to your crypto portfolio you can do so conveniently through the Tap app. In a recent upgrade, the Tap app has added support for a number of prominent cryptocurrencies, including USDC.

Users can simply exchange one of the supported cryptocurrencies for USDC, or purchase USDC using fiat money. These can then be stored in the unique wallets integrated into your Tap account.

When faced with something new or unfamiliar, especially when dealing with money, people often tend to automatically put it into a box. Unfortunately, Bitcoin is no exception. Since its rise in value since its initial launch in 2009, many have been skeptical of how and why it could do so. In this informative article, we explore the common misconception that Bitcoin is a Ponzi Scheme. 

What Is A Ponzi Scheme?

First, let's take a look at what a Ponzi Scheme actually is. Ponzi Schemes are fraudulent investment scams which promise high rates of return with minimal risk. This is orchestrated by a "portfolio manager" taking an investment (payment) from a new recruit and using those funds to pay off earlier investors, taking a portion of the funds for themselves. 

The new recruit will only be paid once they have recruited more new people, whose funds will be used to pay off their investment. As long as new people are entering the system, the earlier investors are seemingly making profits. This all falls apart when the pool of potential investors becomes saturated and no new investors are entering the system. 

The business concept was first mentioned in literature in the 1800s but was officially coined in the 1920s after a person by the name of Charles Ponzi. Ponzi schemes pose as financial services and are illegal in the UK and most other countries and are punishable in the same light as anti-money laundering.

Why Bitcoin Is Not A Ponzi Scheme

As Bitcoin is an entirely decentralised asset and operates using the transparency of blockchain technology, Bitcoin cannot be a Ponzi Scheme. Due to the nature of blockchain, anyone at any time can verify all transactions made on the Bitcoin network, dissimilar to a Ponzi Scheme where "investments" are shrouded in secrecy. 

Ponzi Schemes need to obfuscate transactions from both investors and regulators in order for the scam to work, which is the exact opposite of how blockchain functions. These issues alone prove that Bitcoin cannot be a Ponzi Scheme.

Instead, Bitcoin is open to anyone and following one purchase the investor can own and hold the original cryptocurrency. As a digital currency, Bitcoin is stored in digital wallets which are accessible to anyone, without the need for lengthy paperwork. Most exchanges offer users access to a Bitcoin wallet, which can easily be accessed directly on the platform.  

Bitcoin Volatility Confirms It Is Not A Ponzi Scheme

Not often seen in a positive light, Bitcoin's market volatility puts the final nail in the coffin when considering whether Bitcoin is a Ponzi Scheme. See, in Ponzi Schemes investors receive suspiciously consistent returns, which is just not plausible when it comes to trading Bitcoin.

Day traders have been known to witness high price swings over short periods of time, sometimes losing or accumulating a large amount in mere hours. This is entirely unrealistic when it comes to the functioning of a Ponzi Scheme. 

Instead, Bitcoin's price history has shown that substantial growth is generally witnessed in four year periods. This is in line with the Bitcoin halving event, an automated change to the miner's rewards which manages the number of new coins entering circulation. After every 210,000 blocks are added to the network's blockchain, the halving event is initiated, and the rewards are automatically halved. History has shown that roughly 12 - 18 months later Bitcoin has seen substantial gains. The next halving to take place will be in 2024. 

How To Avoid Ponzi Schemes In The Crypto Realm

While Bitcoin and other cryptocurrencies are not Ponzi Schemes themselves, that doesn't mean that Ponzi Schemes cannot use Bitcoin to lure in potential investors. Beware of any investment "firms" looking to invest in crypto for you, particularly if they're claiming to provide inflated rates of returns. 

Instead, invest in crypto yourself through a reputable platform like Tap and take matters into your own hands. Buying cryptocurrency is simple, you can do so with a credit card or bank transfer, and then the funds are stored in the digital wallets allocated to you specifically. From the mobile app you have full control over your funds, able to sell or buy at a moment's notice. The platform also utilises integrated technology which scans multiple exchanges and order books around the world to find you the best price in real time. 

Stay clear of Ponzi Schemes and other investment scams, and utilise the financially-inclusive world of crypto investments yourself.

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We know the cryptocurrency market has a reputation for being volatile, however, these last few months have been particularly nail-biting for many investors. As markets swing in wild directions, some have made impressive gains while others have lost out. In this article, we explore whether crypto markets will ever overcome volatility and what one can do to gain financial stability in turbulent times. 

What causes the markets to be so volatile?

Due to a lack of central authority, the markets more accurately present investor sentiment, rising and falling as a result of the actions of people actively buying and selling. While volatility has a bad name and is certainly a hinder in terms of mainstream payment method adoption, it is valued by traders as it poses an opportunity to make big gains. Traders have created full-time jobs that benefit solely from the crypto market's volatility.

Regulatory frameworks are likely to positively affect the volatility prevalent in the digital currencies markets, but until that is implemented let's explore the biggest factors behind the volatility.

Entirely digital

Due to cryptocurrencies being digital and not backed by any commodity or real-world currency, their prices remain dependent on supply and demand. Essentially relying on faith: the prices will rise based on people believing in the product and accumulating more, while prices will drop when investors lose faith and sell. The markets remain volatile as investors are not concrete in their positions.

In its infancy

Cryptocurrencies have been around for just over a decade, a relatively short time for an asset of such influence. As the technology remains in its earlier years there is still plenty of development that needs to take place. So while Bitcoin has built an incredible market capitalization, there is still a long way for the cryptocurrency to go. 

This contributes to the market's volatility as markets tend to rise when new developments (upgrades, discoveries, implementations) take effect, while markets can fall when deadlines are missed or errors occur, leading investors to lose faith in the technology. 

Outside speculation

Arguably the biggest contributor to the market's volatility is the speculation surrounding cryptocurrencies. Predicting price swings and then acting on them has caused many an upward and downward spiral. From buying in just before the price rises to short just before a crash, speculation plays a large role in the market's swings and increased volatility. Speculation management is a key ingredient when it comes to successfully trading crypto.

Increased media coverage

Another great contender to volatility in the market is the media. Having a great influence over investor sentiment, the media has been behind many price swings in the market. With the power to launch or crash a market, the media plays into the narrative by encouraging investors to quickly buy or sell with attention-grabbing headlines.

Easy accessibility

The final factor to consider in the causes behind the market's infamous volatility is its accessibility. Stock markets and real estate typically attract a certain calibre of investors, while the entry requirements for investing in crypto are very low. It does not require any licences, degrees, lawyers or heavy capital. Anyone can enter the market with a small amount of money and internet access.

The market has typically been dominated by retail investors, however, in recent years institutional investment has been on the rise. The simple way in which anyone can enter the market provides an open invitation for volatility. 

All playing their own role, these factors contribute to market prices being thrown in seemingly random directions at unpredictable time intervals. Understanding the fast nature of price swings and what might be behind them will contribute to investors and traders gaining a tighter grip on what might happen next. 

Can the market stabilize?

Now that we've explored what factors are behind the volatility, let's dive into whether the markets could stabilize. Bitcoin maximalists claim that once Bitcoin reaches a level of adoption, the price will stabilize. While there are no clear criteria for what "adoption" is, the theory remains true. 

According to this data, Bitcoin is currently the 14th biggest currency in the world, sitting comfortably between the Swiss Franc and the Thai Baht. This illustrates the cryptocurrency's affirmative dominance despite its volatility. 

Will it improve with time, or will a seismic shift in the way people perceive cryptocurrency ultimately solve the volatility issues. At this time, one can't say for sure. So in the meantime, continue HODLing if that's what you came here to do, or leverage the swings as you trade, in the end, you can make gains either way and still come out smiling. 

How to maintain financial stability in volatile markets

First and foremost, never invest more than you're willing to lose. This is the golden rule of investment across all asset classes. The next universal rule is to not act on emotions, do not make impulsive decisions when it comes to your trading portfolio, rather expect volatility and have a plan. Below we outline several tips on how to remain calm in stormy markets.

• Do not pay attention to short-term fluctuations and rather stay invested for the long term.
• Create a limit order that will automatically execute if markets crash. This will create a safety net should things turn south.
• Consider that typically when volatility subsides, prices increase.
• Remember why you invested in the asset and refer back to its potential.

ISO/IEC 27001

TAP manages confidential information on a daily basis and recognizes the importance of protecting this information from the risk of data leakage, loss or theft. Thus, it has adequately implemented the leading international and certifiable Standard for information security managementISO/IEC 27001 (IT Information Management System).

ISO/IEC 27001, sets out the requirements for defining, implementing, monitoring and improving an information security management system (ISMS) and it involves people, processes and IT systems implementing a risk management process. It offers a systematic and well-structured approach that protects the confidentiality of TAP’s stored information, ensures the integrity of the company data, and improves the availability of its IT systems.  

Tap’s ISO/IEC 270001 certificate of implementation has international readability and validity and ensures the verification of compliance with relevant laws and regulations.

At European level, the GDPR (the General Data Protection Regulation 2016/679 on data protection and privacy in the European Union and the European Economic Area), encourages the use of certification systems such as ISO/IEC 27001, as this standard describes the requirements that an organization must meet in order to manage its information security comprehensively and effectively. By adopting ISO/IEC 27001, Tap can demonstrate that actively manages its data security in accordance with international best practices.

100m insurance Bitgo

Tap’s partnership with BitGo, a top qualified digital assets custodian, ensures the highest-level of security for Tap’s customers.

Tap’s first line of defense against theft, loss or damage of private keys includes software, hardware, physical security measures and top quality Know Your Customer (KYC) and Anti-Money Laundering (AML) policies and procedures. By carrying a $100 million coverage insurance as an additional layer of protection from Bit Go, Tap integrates a significant hedge against loss.

Licensed & Regulated

Tap is a legitimate Distributed Ledger Technology (DLT) provider as it is fully authorized by the Gibraltar Financial Services Commission (GFSC), with license number 25532.

This authorization ensures that Tap meets all the required standards to provide efficiently and securely its services and has proper regard to the DLT associated risks in order to protect its customers.

In general, Tap is fully complied with all applicable regulatory, legal and contractual rules and the company’s policies and procedures are frequently reviewed and updated in order to align with the regulative framework. Tap checks on a daily for compliance breaches, ensures that its staff is properly familiar with the KYC and AML/CTF global standards and guarantees the effectiveness and adequacy of its procedures, internal controls and systems.

(In addition, TAP’s provided prepaid card is issued by Transact Payments Limited, which is regulated by the Financial Services Commission Gibraltar, under the Financial Services (Banking)Act 1992.)

As cryptocurrencies grow in popularity and adoption, they are fast becoming a household term, a norm if you will. 2021 was a big year for digital assets, with the entire market cap exceeding $3 trillion, institutional investment at its highest, and countries like El Salvador declaring Bitcoin as a legal tender. 

On top of this financial institutions around the world are incorporating the asset class into their balance sheets and many are exploring the concept of CBDCs (central bank digital currencies). As digital assets become increasingly integrated into our daily lives and a more popular option for the customer, it's time we harness the power of this nascent technology. 

What is crypto as a service (CaaS)? 

CaaS stands for Crypto as a Service and is a white-label solution for businesses and financial institutions that want to provide cryptocurrency services to their consumers. CaaS is essentially banking as a service for digital currencies.

CaaS works as a simple plug-and-play system for businesses wanting to provide their customers with digital assets trading, brokerage and custody services. Customers can interact with the services directly, without having to go through the providing company.

This infrastructure can then be used by any platform, from fintech, bank, or financial services businesses, as well as be integrated into mobile applications.

Given that asset managers manage £6.6 trillion in the United Kingdom alone, and that listed company values reach a staggering $93 trillion overall, the potential to offer traditional institutions with crypto cloud services is huge. As banking as a service has taken off, the expectation is that CaaS is going to follow its lead.

How does CaaS work?

The Crypto as a Service solution allows businesses and financial institutions, such as neobanks, to establish new revenue streams by providing a simple means for their customers to engage in crypto payments and the digital assets market. The consumer will be able to:

• Buy and sell digital assets
• Pay for goods and services using their digital wallet
• Securely store cryptocurrencies

The companies providing these services also receive access to highly secure and compliant transaction data monitoring and risk management systems. They will also be responsible for developing the global payments user interface, as CaaS functions as a back-end-only tool.

This ensures that the crypto services are entirely aligned with the brand, and do not appear to be a third party intervention. Through this interface, users can engage in crypto payments and manage crypto funds.

The main company providing Crypto as a Service will be responsible for aspects like KYC/AML, order processing, transaction monitoring, and digital assets custody, relevant to each jurisdiction.

For example, the regulatory requirements will be different in the United States and United Kingdom. This will establish the underlying trust when it comes to new customers engaging in crypto markets and other asset classes. These innovative business models are revolutionising the way in which people around the world can engage in decentralized finance without the risk.

Who would use CaaS?

Crypto as a Service allows regulated central banks and fintech firms to enable their customers to invest, store, trade, and pay in crypto. As these businesses offer cryptocurrency services they too can open new revenue streams.

The technology provider will also allow pension funds and asset managers to invest in Bitcoin and the greater crypto ecosystem on behalf of their clients. This new technology generates increased cash flow for businesses and an increased demographic of users.

Remittance firms will be able to send cross-border payments for a fraction of the cost while gaming companies, e-retailers, and brands can all begin utilizing digital wallets to allow their clients to make purchases in cryptocurrency and an overall improved experience.

CaaS is designed to assist any business looking to innovate their global payments system and enter the global market with crypto services.

Tap's CaaS service

Tap provides businesses with a reliable Crypto as a Service service that allows the company to leverage their already existing infrastructure and incorporate cryptocurrencies. The leading plug-and-play solution easily integrates into the company's hardware and allows any business to tap into a new demographic of crypto-interested customers and level of efficiency.

As we saw a demand for businesses looking to integrate cryptocurrencies into their already established models, these collaborative services were the logical next step.

Through the on-demand Crypto as a Service service, we are able to deliver another layer of crypto services on top of our already established mobile app.

With Tap's high-performance CaaS services, businesses are able to provide their customers with instant access to the crypto sector, with a secure and convenient means of buying, selling, and trading cryptocurrencies as well as access to a yield-generating wallet (a crypto savings account).

While a crypto exchange can take a minimum of two years to build, our CaaS can be implemented in a few weeks. Tap also holds the necessary regulatory compliance and insurance required for companies offering this level of service in the crypto environment.

The integration of these services removes the workload of managing cryptocurrencies and allows your business to focus on more scalable endeavors. No blockchain expertise needed.

To learn more or for more information, please visit our website and contact us should you wish to incorporate this level of innovation into your business.

Closing Thoughts

The greatest obstacle in the path to global crypto adoption is the belief that crypto is too volatile and that it lacks regulation.

While the markets are known to engage in volatile price movements, the understanding is that once regulatory frameworks are imposed this will be curbed.

Government bodies around the world are working to achieve this, as cryptocurrencies have firmly become a permanent feature on the greater financial landscape. As banking as a service (BAAS) has taken off, in light of the rise in crypto adoption, CaaS is the next step forward.

Crypto as a Service aims to provide both access and education to those looking to incorporate this crypto-centered product into their business and lives and integrate themselves into the digital asset ecosystem. Be sure to find a reputable platform that provides CaaS services with an easy-to-integrate API and high regulatory standards.

These crypto-powered products and services will assist the general public with becoming more familiar with the technology while allowing those already interested in harnessing and leveraging their crypto portfolios. After all, cryptocurrencies and the greater asset class are here to stay.

This year has seen a gradual but significant improvement in cryptocurrency prices from the chilly crypto winter of 2022. Factors such as cooling inflation and a more relaxed macroeconomic situation have given crypto the space to turn upward and settle in the green. While the road to recovery (to 2021 prices) might be long, there is definite hope on the horizon.

Before we dive in, let’s first review the previous crypto bull runs associated with halvings. When it comes to bull runs, there is a historical pattern of prices rising several months after a Bitcoin halving. This effect tends to take place twelve to eighteen months after the halving event.

This article tends to focus heavily on Bitcoin as the cryptocurrency holds a lot of weight in the industry. Bitcoin market trends tend to dictate the way forward for many other altcoins, while this isn’t black and white, it tends to be the norm. When Bitcoin enters a bull run, so too do other cryptocurrencies, and when the Bitcoin price is down, the same applies. 

What is a Bitcoin halving?

Satoshi Nakamoto, the creator of Bitcoin, strongly believed that scarcity creates value. When designing Bitcoin, it was decided that there would only ever be 21 million coins, and while these can be broken down into small decimal places, there is no changing that maximum supply. 

In order to leverage the scarcity and ensure an even distribution of new coins entering circulation, Nakamoto designed a halving mechanism. The mechanism ensures that the currency remains deflationary, controls how many new coins enter circulation, and plays little havoc on the market. 

To understand how a halving works, one must first understand how Bitcoins are mined. Through a decentralized network, new transactions are entered into a mempool while they await confirmation. Miners will then compete to verify them by completing a complex cryptographical puzzle. The first miner to successfully complete the puzzle is awarded the job of verifying the transactions as well as earning the rewards. 

Once all the transactions have been verified they are executed and the data from each transaction is added to a block, which is added to the blockchain in chronological order. The miner then receives a transaction fee from each transaction as well as a miner's reward for adding a new block to the blockchain. 

Every 210,000 blocks, roughly four years, this reward is halved, making it a significant factor in what is known as the halving experiences. In 2009, the miner's reward was 50 BTC, today it is worth 6.25 BTC. While the price tends to increase substantially, the reward is automatically halved at these intervals. Written into its code, the halvings are automated activities that cannot be altered.

Reviewing previous bull runs

Bitcoin's first mini bull run

The first recorded "bull run" in the crypto sector took place in April 2011 when the price of Bitcoin rose 3,000% over the space of three months. After reaching $1 in April 2011, the coin went on to reach $32 in June. However, this price increase was short-lived as the price returned to $2 in November.

The next year the cryptocurrency underwent its first halving in November, ending the year between the $13 and $14 price mark.

2012 halving / 2013 bull run

In the first few months after the halving, the price rose from $13 to $30. By April, one Bitcoin was trading for $100, its then all-time high, spurring interest from curious outsiders. By November, twelve months after the initial halving, Bitcoin broke the $1,000 barrier. This too was short-lived as the price dropped to around $530 a month later.

2016 halving / 2017 bull run

The next halving took place in July 2016, when the price was trading at around $600. After years of the Bitcoin price bouncing between $100 and $900, it finally hit the $1,000 mark again in January 2017, six months after the halving. By mid-May, the price had doubled to $2,000, and by December of the same year, the price sky-rocketed to just under $20,000.

Sparking a Bitcoin frenzy, the digital asset became a hot topic in mainstream media and many market participants hopped on the bandwagon. This also sparked widespread development within the industry, with many altcoins being launched and what has become known as the "ICO craze". Due to the quick ascent of this nascent technology, user adoption and regulation became prominent topics of discussion in financial and regulatory circles.

By December 2018, just a year later, the price had shrunk to $3,236, while in December 2019, Bitcoin was trading at $7,200.

2020 halving / 2021 bull run

In 2020 the world was struck by the Covid-19 pandemic, causing unprecedented damage to economies around the world. While Bitcoin and other digital currencies took a knock, the industry proved to be much more resilient than most other traditional markets.

Dropping almost 50% to lows of $4,900 in March 2020, the price gradually recovered to $9,000 in May when the next halving took place. The upward price trend continued its climb, reaching $29,374 in December, another all-time high.

In the early months of 2021, the Bitcoin price doubled in value reaching $64,000 in April. By July, it was trading around $30,000 again before skyrocketing to $68,000 in November. By January 2022 the price had corrected to $35,000 before the market was faced with several unfavorable factors.

Markets around the world took another hit when Russia declared war on Ukraine, sending the price of everyday items including fuel soaring. Governments increased interest rates to the highest they've been in decades, and global supply chain issues caused by the pandemic continued to drive upset.

With the world in financial uncertainty, not to mention the demise of several cryptocurrency networks and exchanges, many participants pulled their money from the crypto markets as well as tech-based stock investment markets. This saw the price of Bitcoin dip below the $20,000 mark for the first time in two years, causing widespread uncertainty and speculation.

2022 was officially declared a crypto winter and while prices rose roughly 29% year-on-date, 2023 wasn’t the promised land that crypto enthusiasts had dreamed of. 

Are we headed toward the next crypto bull run?

Price increases aside, the Bitcoin Fear and Greed meter observed ( at the time of writing) a hopeful incline from a state of “Extreme fear” to a “Greed” greed rating. This measure of market sentiment is a vast improvement from 2022 and, alongside expert analysis, indicates that the cryptocurrency has moved into the accumulation phase. According to the Wyckoff market cycles, this is the prerequisite to the mark-up phase and indicates the end of a bear cycle.

The digital asset market remains volatile and unpredictable, and one cannot predict what might happen in the coming months or even years. What we do know is that historically bull runs have succeeded halvings, so grab your popcorn we should be in for an interesting ride.