Recently, I've noticed more and more people asking about how to invest in stablecoins, but most may have misunderstood. The stablecoin market has now expanded to a size of $250 billion and is still rapidly growing, which indeed attracts a lot of attention. But there's a very important cognitive difference — what you should really focus on might not be the stablecoins themselves.

Let's start with the most straightforward point: stablecoins are always worth $1. No matter how popular they are, no matter how many people use them, holding them for a long time still equals $1. This is not a flaw; rather, it is the original design intention. Stablecoins are meant to eliminate volatility in the crypto market, allowing you to switch seamlessly between traditional finance and blockchain. But if you want to make money through stablecoins? Then you need a different approach.

For example, instead of investing in USDC (the second-largest stablecoin), consider the issuer, Circle Internet Group. Since its launch in June, Circle's stock price has risen nearly 130%, while USDC remains at $1. This is the difference. If you want to truly earn returns in the stablecoin investment space, investing in the issuer is the right way.

But here’s a key risk to be aware of: stablecoins sound "stable," but they are far from risk-free. The biggest hidden danger is losing the peg to the dollar. TerraUSD in 2022 is a vivid example — it dropped from $1 to a few cents within 24 hours. Therefore, understanding how the issuer supports the stablecoin is crucial. Tether and USDC are backed by cash and high-quality cash equivalents, but before new regulations are introduced, other issuers use a variety of assets — from volatile cryptocurrencies to low-grade commercial paper, everything.

Another easily overlooked point: although stablecoins are all traded at $1, their uses vary greatly. Some are optimized for cross-border transactions, some maximize yields through DeFi protocols, some help traders quickly move funds between different chains, and some are pegged to other fiat currencies like the euro or yen. So, choosing which stablecoin to use depends on your specific needs.

If you really want to know how to invest in stablecoins, the two giants, Tether and USDC, are generally safe bets. They have strong liquidity and broad applications. Moreover, as regulatory frameworks improve, large companies like Amazon, Walmart, and Uber might launch their own stablecoins, creating new opportunities. The key is to do your homework and understand the specific design and risks of each stablecoin. Being cautious now can save you a lot of trouble later.