Bitcoin Forum

All stablecoins are a big fat lie.

By defintion, a stablecoin is a cryptocurrency that is pegged 1:1 with the US Dollar.

If you check any stablecoin's price chart, it is in fact, extremely volatile.

If they truly were pegged 1:1 with the US Dollar, the price chart would be a flat line all across the board.

Instead, sometimes stablecoins can go sub $1, or over $1.  I've seen USDT at $1.02 and $0.98 before.

The fact that stablecoins are centralized means there's an issuing authority, and that authority is acting fraudulently by occasionally selling or buying for more or less than $1

I recommend you all avoid these "volatilecoins" as they should be called until there is actually a true, value immutable, by definition, stablecoin.


Thank you for coming to my TED talk.

You're right, they are still volatile but not that much. So those centavos of movement can be said of one characteristics they have as it's not exempted for being volatile.
But if you look at most of these known stable coins, they got a lot of volume and that's why even they're called stable coins, they still get to move just like the traditional fiat currencies that we have. They're also stable but they're also changing a little by little.

Ideally, it's indeed should have a fixed and flat price line.

The thing is a stable coin exists within a marketplace(exchange), then there will be a supply and demand, that is some reason why it fluctuates. If let's say the USDT is within complete custody or within the issuer authority as you said, well I guess they can safely burn and mint straightly to keep maintaining the price. It's not mainly the issuing authority that are in full control, but the market sets it prices.

Believe me, that is as stable as they can get in this Wild Wild West world of crypto. A $0.02 swing isnt enough to make me change my mind on things

This is the reason, The current volatility of the stablecoin is already the best in crypto since there's a lot of different exchange trading it with different volume in there order book while it's value depends on how strong the market sentiment especially if the buying/selling volume is greater than on the volume of the order book.

Real fixed price will be possible if USDT is only being traded on a single exchange without order book but just a single purchase only with fixed price.

I think this is nitpicking at straws and pedantics.

Yes, stablecoins can depeg significantly and even for extended periods of time. Algo stablecoins are especially prone to this risk.

However, objectively they are much more stable RELATIVE to fiat compared to decentralized cryptocurrencies. Whether or not they are worth using is a different question altogether, and I would say that the risks outweigh the rewards here.

The reason why it’s not exactly 1 is because of liquidity issues. You need to understand that if you want to sell your USD for USDT there needs to be some counterparty to give you the trade, so a market maker. These market makers basically barely make anything for exchanging the coins for you so they basically have a skewed liquidity so they can make a small fraction of a percent of every trade.

When they make it for both sides they make a little profit. When you sell your tether or vice versa you are not buying or selling to the exchange but some market maker or another traders. Hence why it’s not pegged to 1. I can be wrong but I am fairly sure this is the real reason.

Most likely you wrongly got the definition of a stable coin. Stable means it's not volatile the rate inflation you are seeing is compared with USD rates. USD isn't USDT. It has a different value. You have to understand that, like the everyday rate of your native currency against USD won't same. Ther would be little difference different day. Since USDT is an individual cryptocurrency, the same thing happens with USDT. But it's not a volatile currency at all. I know it's a controversial cryptocurrency supported by many exchanges. But I won't agree with your explanation.

well, if we look at this in detail, it's not really stable. the point is, not always the ratio of the exchange is 1:1, because sometimes the price of stabilcoin is also more than $ 1, or even less, depending on the volume available. even if you search for it now, you will find it.

well, several reasons I can say why this is happening, one of which is because of price adjustments. crypto prices always go up and down quickly, stable coins will try to adjust to it quickly, so the ratio is sometimes not 1:1. In addition, another problem is the issue of liquidity. however, volume is also very important to maintain the price of $1, as people also take advantage of the coin ups and downs to get the coin price stable below $1. however, the price won't be that far from $1. I think this is still very reasonable.

A small swing was nothing but it can save use from the volatility or at least you can still save more than 90% of your value from the volatility that is always happening in the market. I know that so well if this didn't meet your expectation but I think that calling this as a scam is unreasonable as they are still operated. We are in the crypto market as long as it doesn't have big swing and for me that's not even problem.
You must also know that if there are demand and supply. Sometime the demand was putting the price less than 1 dollars and in another way sellers are also putting the price more than 1 dollar.
Even when it's called as stable coin but yeah you are in crypto now.

I mean of course you are technically right that even though those coins are called stable coins they are not really 100% stable all the time. Especially during times of extremely volatile markets we have seen stable coins moving up or down like 1% for a short amount of time which can make a quite a different if you are owning a lot of stable coins. That being said i don't think that they can be called a big fat lie because after all i think the current implementation of stable coins is as close as it can get to really stable equivalents of a certain FIAT, in most cases the USD. In order to have a 100% stable coin i think we would need countries to release their native currency on the blockchain.

they are in fact relatively stable if you compare it with other altcoins, if the price goes sub $1 sometimes it’s because there is overflooding of sell orders in the market, and that kind of price difference is gonna be fixed automatically by the ones that seek profit from the margin alone.
i think sweating over the fact that stablecoins could sometimes have a margin of few cents doesn’t make sense at all and making a big deal out of nothing.
also, it’s always wiser seeking the right timing for making an order if it comes with stablecoins because even if their prices could go down as much as it could, it will eventually returns back in its real value because for the simple fact that it’s quite literally backed by real money.
People are only looking for the best way to avoid volatility once they wanna keep their assets to be safe and it can't decrease on its value.

Lol for the end tedtalk joke, funny. As it is said before, the "volatility" is not really that big and that is why they are called stable, and that drop and increase not being higher is the reason and power of it at the same time.

I agree that they are not stable only because they are centralized and they would be getting a ton of bad return one day when they crash but people do not see that just yet, people will see it when it is too late and that will be the biggest problem. People need to realize the fact that crypto is decentralized and even the stablecoins of crypto needs to be decentralized as well like DAI, all others are always carrying a risk.

Stable coins have a 1:1 ratio. However on the exchange it is not possible to set 1 USDT = 1 USD. Because it can not place an order at the same price. Of course, there must be a difference between the buying price and the selling price, even if it's a smaller number. Likewise among other stable coins.
If transactions are not made (buy orders / sell orders), of course the stable coin does not generate volume. In my opinion there is nothing wrong with any of this.

https://i.ibb.co/PYcB1t0/ss.png

I believe stablecoin is a good term for these currencies. 2 cents up or down don't make much difference, so they continue being stable anyway.

It would be wrong if they were called static-coins. Only then it would mean they couldn't fluctuate even a little, being a must for the price to be static.