Although some people believe that it is better for them to buy a crypto dollar instead of the traditional dollar, the two currencies have important differences.
For example, their management and manner of investment are the main ones, as are their risks. Here are more details about:
- What is the crypto dollar
- How it works
- Differences with the traditional dollar
- Risks
- What is its value and how to acquire it
What is the Crypto Dollar?
It is a type of online currency whose value is stable. The main reason for this behavior is its link to the traditional dollar. In other words, its price is theoretically equivalent to $1.
This type of currency is used to make financial transactions in a simple and immediate way, without having to resort to a traditional banking institution.
However, there are some types of crypto dollars, including:
- Tether or USDT: it is the most popular on a cryptocurrency exchange platform such as El Dorado and is backed by a reserve of traditional dollars.
- USD Coin or USDC: it is a digital currency issued by the Circle entity, it is audited on a regular basis, allowing it to guarantee a backup.
- Binance USD or BUSD: is a cryptocurrency created by Binance with a Paxos association.
- COME ON: contrary to what happens with other stablecoins, it works in a decentralized way and is backed by smart contracts and crypto collateral.
It should be noted that there are more stablecoins, some backed by real estate and others by gold. In other cases, the crypto dollar is backed by cryptocurrencies that use special mechanisms to give it stability.
On the other hand, some are not a replica of any known asset, but are controlled by algorithms that work to set a price without being victims of volatility.
However, all the stablecoins that are anchored to the price of the traditional dollar are those that are known as the crypto dollar.
Advantages of investing in the Crypto Dollar
- Low cost and immediate transactions: all the operations you perform with the crypto dollar they have lower fees and are immediate compared to traditional transfers.
- Accessibility from anywhere: you only need an internet connection and a computer or smart device to access your crypto dollars, there are no restrictions by governments.
- Decentralization: The crypto dollar is not regulated by banks or the government, as is the case with the traditional dollar, this means that you will have greater control over your funds.
- Inflation protection: if you are in a country where inflation is affecting the economy, it is convenient Buy crypto dollar instead of keeping the local currency. For example, this happens in Venezuela, with the crypto dollar being the best option to protect yourself without depending on banks or the traditional dollar.
How does the Crypto Dollar work?
First, the crypto dollar was created to maintain a 1-to-1 relationship with the traditional dollar. All apps or exchanges that operate with the crypto dollar and traditional dollars maintain this rule.
Thus, as a user, you will have your digital currency backed by physical dollars or a similar asset that is equivalent to the amount of tokens that circulate, making it more reliable for use.
Likewise, the operations you carry out in crypto dollars are executed through blockchain. This eliminates the need to resort to intermediaries such as the bank, which reduces commissions and times to carry out a transaction.
However, to have your crypto dollars, you need to have a virtual wallet or app exchange. One of the most popular is El Dorado, after creating your account there, you can protect your funds from the volatility of markets when buying crypto dollar.
Importance of the Crypto Dollar
It offers a way to protect yourself from cryptocurrency market fluctuations without the need to resort to cash. It is precisely this stability that makes it the main option for investors.
Since people are looking for ways to keep their funds protected against inflation, maintaining a value similar to the traditional dollar, but maintaining the advantages of Cryptocurrencies.
The crypto dollar is useful in countries where financial systems are inefficient or the restrictions on exchanging currencies are very strict.
It also allows you to send money from one place to another immediately, without having to use exchange offices or paying extra for international transfers between banks.
Differences between the Crypto Dollar and the Traditional Dollar
The differences between the crypto dollar and the traditional dollar are important. First, the physical dollar is backed by the government, but the crypto dollar is virtual and only remains on the blockchain network.
With regard to use, the traditional dollar can be used for all types of transactions, such as buying coffee for international payments. Instead, you use the crypto dollar with merchants affiliated with the crypto world and to access DeFi sites.
However, the dollar can be a victim of inflation and government regulations, which can cause changes in its value over time. However, the crypto dollar has been created for stability, making it a reliable asset for investors.
Availability is also another important difference. Well, the traditional dollar is limited to bank schedules and local regulations, while the crypto dollar allows access 24 hours a day.
The cost per transfer has a significant influence, in the case of transfers with traditional dollars, these vary, especially if they are made abroad. But, in the case of the crypto dollar, they are low and do not depend on the recipient.
Privacy is key, in the case of the traditional dollar, your information is known to the bank and the government. On the other hand, the crypto dollar offers you greater privacy, making you feel more secure when making a transaction.
How are crypto assets different from traditional stocks?
Crypto assets operate only on blockchain networks and are used to make exchanges and store value. On the other hand, traditional actions are a fractional representation of an entity's participation.
Although there are different assets, stocks and cryptocurrencies can be traded and serve as an investment object. But shares have a different method of acquisition when compared to digital currencies.
In addition, investing in cryptocurrency does not make you part of an organization, nor does it generate dividends, from the traditional point of view. On the contrary, it helps you to do staking and generate passive income with them.
Another key point is the way in which we carry out the exchange of shares with respect to cryptocurrencies.
With an exchange like El Dorado, you can Buy stablecoins with traditional dollars at any time of the day. However, actions are only active on weekdays and at specific times.
Crypto Dollar Risks and How to Protect Yourself
- Security: you must store your crypto dollar on an exchange or electronic wallet with a password, especially in a hardware wallet to prevent your account from being hacked.
- Volatility of exchange apps: although a stablecoin has a price pegged to the traditional dollar, its value on exchanges may change depending on the option you choose.
- Regulation: The laws regarding cryptocurrencies vary from one nation to another, so you have to know them to avoid unpleasant surprises.
How much is the crypto dollar worth?
According to El Dorado, a crypto dollar exchange platform, its value may vary slightly depending on the exchange platform and the supply and demand of the local market.
That is, depending on the amount of crypto dollars you are going to buy, if it is higher, it is possible to find sellers with a price close to the traditional dollar.
But, if you resort to low amounts, sellers will have higher rates so you can purchase your crypto dollar. In particular, if you buy 100 USDT, the ratio will be 1,005 USD to 1 USDT in the El Dorado app as of today, March 9, 2025.
This USD-to-USDT or USDC ratio may vary depending on the platform or virtual wallet being used, although it serves as a reference for an approximate amount of investment to be made.
Which cryptocurrency is best to invest now?
Bitcoin continues to lead the cryptocurrency market despite market fluctuations. Whether in terms of capitalization or global recognition, it is the undisputed option for investors.
However, if you want to protect yourself from fluctuations in the cryptocurrency market and have the same advantages of the traditional dollar, it is best to buy USDT, USDC or DAI. All of them are stablecoins whose value is pegged to the traditional dollar and have a backup.
Their ratio is 1 to 1, although we must not forget that this is theoretical, since it varies depending on the exchange to be used to obtain them.
The stability of the crypto dollar makes it attractive to those who want to protect their capital in the short term. In addition, it is used on a daily basis for individuals and companies that want to make financial transactions without paying attention to volatility.
What is the most profitable cryptocurrency?
Determining which cryptocurrency is the most profitable depends on several factors, including the time period considered, the level of risk you are willing to assume and current market trends.
The crypto dollar is profitable because it allows you to make payments instantly at any time of the day and with low fees. This advantage is especially useful for retailers, since purchase times are automated and managed more efficiently.
In addition, by having low rates, consumers and merchants will have a greater economic benefit, getting the most out of their funds.
How to buy Crypto Dollar?
- Select a trusted exchange: you must choose a regulated and reliable platform where it is convenient to buy crypto dollars. El Dorado offers you support for obtaining stablecoins such as USDT or USDC.
- Open an account: register a profile in the app, complete the KYC verification process and activate your account.
- Deposit digital assets: you can deposit digital assets to your account using the traditional dollar and buy crypto dollars on the same exchange.
- Start trading: Make financial transactions with your crypto dollar or other digital currencies to keep your money in a safe place free from inflation.
- Safeguard your assets in a secure wallet: After completing the operation, send your funds to a hardware wallet to have your capital protected against hackers.
The crypto dollar and the traditional dollar have key characteristics that differentiate them. The choice between one or the other will depend on what you really want and the financial context in which you are.
