What happens if a stable coin is in high demand?

[Escf4]

In cryptocurrency stable coins that are high in demand ,can create, scarcity of supply in the market and in turn the price of this stable coin in the market will rise up ,because of its great demand from the customers .

[Streamlink]

A stable coin is any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.

My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?

The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.

Please correct me my misconception

simply applies the law of supply and demand, if a coin has a limited supply but the demand is high, it tends to increase in price, therefore not stable, if a coin has low demand, means it has plenty of supplies in the market, means no one is buying it, therefore unstable too, a stable coin has plenty of supplies and the demand is also high, volatility is the major issue here, the fast paced trading due to high demand and also growing supplies because of mining and panic selling on the market are the culprit.  

For what it is worth, at least, USDT crew claimed USDT is backed by real dollar in the bank. We do not know how true this is, but recently, some issues were raised that brought about questioning how USDT team operates. The supply for a stable coin is definitely going to be uncapped, which is still something relative to normal fiat, just to be able to meet up with the demand and if truly it is backed by real amount of dollar in the real world, I guess that makes it more like a real tether.

[andriw]

Of course fiat has a total supply according to the needs of the country, because if the supply is not limited it will cause an increase in the price of goods and a decrease in the value of the currency, the amount of money in circulation will cause prices to adjust up, so that money becomes less valuable and more worthless because the amount is too much, or commonly referred to as inflation.

[ralle14]

My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?

The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.

According to coinmarketcap stablecoins do have a total supply remember that maximum supply is not the total supply.  Looking at their marketcap it gradually increases over time in this case no one will be left out. We know that tether has the ability to create more usdt out of thin air they have a past history of doing so and I don't think that's going to stop anytime soon.

Honestly people are not interested in stable coins since we cannot make money with that.

Although people aren't interested in stablecoins like tether the daily trading volume remains to be high regardless.

[BlueStackz]

In cryptocurrency stable coins that are high in demand ,can create, scarcity of supply in the market and in turn the price of this stable coin in the market will rise up ,because of its great demand from the customers .

When the demand for a stable currency is high, the supply will of course be short but the price will also go up as a result of which the factor of profitability will be more visible.

This implies that the term stability is solely responsible for the market value and status of a coin and this is something that is of prime importance to investors around the world. So there are great chances of earning good money when the stable coins are in high demand.

[Kakmakr]

Asset backed Crypto currencies is a very bad idea, because it voids the advantage of having a fixed supply of coins. Let's take Gold for instance, because new large Gold deposits are found almost every year and the price of Gold and other precious metals are being manipulated by large cartels and also some governments. 

It might be stable, but it is still being manipulated and that is where the problems starts. Bitcoin's price is linked to a fixed supply from the Bitcoin protocol and also what bitcoins are being circulated on the markets. It is not linked to some asset with a variable supply, like Gold and Silver.

What will happen with the price of these asset backed currencies, when astronauts figure out how to bring back massive amounts of Gold from some of the asteroids where large Gold deposits were found? 

[sheenshane]

As far as I know and understand from the market cap price, the coin will unstable the price if have fewer of the demand on the market and it becomes high in supply which is not good, so, therefore there is no stable coin price in the market that having a high demand. Most likely those coins are manipulating by someone else. That's the reason why new token/coins having an exact circulating supply to make fluctuated demand and make unstable price movement.

[magneto]

A stable coin is any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.

My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?

The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.

Please correct me my misconception

It really depends on what mechanism they are using to moderating the stability of their coin.

Different systems can have completely different and contrasting mechanisms of doing so. For example, stable tokens on the BTS network work completely differently to Tether. So there is really no one single answer to your question.

And generally, if the stable coin is decentralised in moderating its volatility, the process takes some time to reflect. So when demand is high, prices will still go up on the market. If you want to see an example of this, go look at the SBD charts.

[charlotte04]

A stable coin is any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.

My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?

The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.

Please correct me my misconception

There will be no coin that could be stable since it is being traded daily without stop. It is not like FIAT that could really be determined by in a constant way.

[timerland]

A stable coin is any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.

My question is: Does a stable coin have a set total coin supply? Or does it have to be able to create and destroy based on the demand?

The image in my head goes like this:
A stable coin pegged to a currency started off its business saying it would have a coin supply of $5 billion. Everything works well until one day, the crypto market goes south and everyone rush to buy the stable coin. The coin is unable to sell to everyone because the demand for the coin is too high, so some people are left out.

Please correct me my misconception

I think that your misconception stems from the fact that you think stablecoins can't be traded on the open market - they can, and they are still affected by demand and supply. There is a central distributor in the case of something like the Tether system, but they don't handle all the transactions that happens out of their site.

There are going to be people more than happy to sell their stable coin for above pegged prices, if the stable coin gets extra demand like that.

Your question about the supply varies depending on the method of pegging, whether or not there is a central entity manipulating the supply or not. And if there is no other way of entering the market in a period of high demand (i.e. buying from a central distributor for the pegged rate), other than on the free market, then prices will go up until the peg is corrected centrally or until demand lessens.

[crazymelons12]

Should a stable coin become so in demand, I would say it would be gigh valued. The prices are connected to demands and because it has a limited supply it is for certain  that the value will go up very high. Even if a coin is backed by a real currency that is stable, it will still go volatile with the demands for it. There will always be changes with its value because this is how the cryptocurrenxy works.

[jujurloe]

if you need crypto coin which is directly connected with fiat then tether (USDT) has done. Each USDT unit is supported by U.S. Dollars are stored in Tether Limited and may be redeemed through the Tether Platform