Stablecoins are never perfectly stable

[Becky666]

True, I haven't seen stable coin that holds firm unto 1$ price for long without losing bit of its value but really the little loss doesn't count, and again stable coins always recovers faster, I can't say which is best but I like using USDT because of its pair supports on many exchanges

A careful study of this stablecoin called USDT made me Concord that, stablecoins are stable undermine their little drifting from be seen as stablecoins. We have seen that USDT has not moved from $1 to $0.8 before now but can move from $1 to $0.9999 which is very little compared to some stablecoins in the cryptocurrency industry. This has been my favourite whenever bitcoin start dipping, many times I exchanged my coins to USDT without looking back or fear of loss, it help me minimize loss in bitcoin volatility.

[Chuky92]

A cryptocurrency being a stablecoin does not mean that the price is literally perfectly stable. It means that there's an effort to stabilize the price as much as possible. Different stablecoins use different methods to stabilize their price. Some peg the value to some other relatively stable asset like the dollar, gold or sliver. Others attempt to stabilize the price themselves by regulating the circulating supply in relation with market capital so that the price stays stable.

There is nothing made by man which is perfect, there is always traces of imperfections, that's by the way. Stablecoins tries as much as possible to be stable even if there is a drop in price, it is always within the range of 0.99$ which is still okay in every sense. Just know that there is every tendency for stablecoins to drop a little bit, just like already stated but it can't go beyond such else there will be panic and once that sets in, people will likely move to a more better stablecoin as there are many of them. So in conclusion, I can say that, stablecoins are really living upto their name, which is keeping funds stable and of course they aren't perfectly stable.

[Ifemini]

In the world generally; nothing is perfect; in the blockchain world; there has not been any perfections which has led to several introductions of new projects; products, to suit the needs of humans and make everything quicker and faster, transparent and brief with blockchain. The same can be said about stable coins. They are not perfect, which is why most times when there is huge demand for it, it goes lowest towards 0.98$, which we can still consider stable.

[Bananington]

In the world generally; nothing is perfect; in the blockchain world; there has not been any perfections which has led to several introductions of new projects; products, to suit the needs of humans and make everything quicker and faster, transparent and brief with blockchain. The same can be said about stable coins. They are not perfect, which is why most times when there is huge demand for it, it goes lowest towards 0.98$, which we can still consider stable.

I really like your points, actually nothing is perfect. But for a fact that stablecoins serve their purpose well makes them considerably stable approximately. For instance looking at USDT and USDC, there is no much fluctuations from 1$ hence I don't see any reason why we should even bother about stablecoins not being "perfectly" stable. Personally I trade more of stablecoin pairs so that if my stop limit or sell order hits, the price does not get affected by volatility.

[Iyeman]

In the world generally; nothing is perfect; in the blockchain world; there has not been any perfections which has led to several introductions of new projects; products, to suit the needs of humans and make everything quicker and faster, transparent and brief with blockchain. The same can be said about stable coins. They are not perfect, which is why most times when there is huge demand for it, it goes lowest towards 0.98$, which we can still consider stable.

It has been reflected when tether has gone to the 0.8 level in the past. even if these were getting backed by fiat money doesn't meant it can make the price become perfectly stable. The demand and supply is still affecting it dude.

[serjent05]

FreeStreamer what's up with you and stablecoin? Lol anyway, there is no loss holding stable coins, the lower I've seen them go is 1% loss, around 1$ to 0.99$, that's what you are going to see, stable coins works perfectly ok and thanks to them they makes trading more interesting and easy

I am contributing to this space by educating and sharing information. There is a loss holding a stablecoin. It's called inflation. Currency is not meant to stand still. Currency is meant to circulate. Currency is not a financial asset. It's a medium of exchange. The word currency itself means literally "in circulation"

How could a  stablecoin with finite supply inflate?  Could you further educate me on this? 

Though I agree that in a stablecoins developers/project owner are the one keeping them stable by keeping the fund supporting the value of the said stablecoin intact so that anytime a person wanted to convert its stablecoin to some other currency, they can convert it with no to minimal losses.  And as other reply stated, stablecoin is not perfect because its price tends to fluctuate a bit and in a worse scenario can even fluctuate higher

It has been reflected when tether has gone to the 0.8 level in the past. even if these were getting backed by fiat money doesn't meant it can make the price become perfectly stable. The demand and supply is still affecting it dude.

but eventually will regain its range of fluctuation in due time.

[MCobian]

I agree that Stablecoins is not 100% perfectly stable, cryptocurrency is definitely volatile. USDT also will not always be priced at $ 1,
USDT will move to $ 0.95 or even go up to $ 1.1. It depends on supply and demand, but at least it will not move far from $ 1. Compared
to cryptocurrency that is not included stablecoins, so if the assets we want to safely store in stablecoins are still the best choice.

[Coin_trader]

FreeStreamer what's up with you and stablecoin? Lol anyway, there is no loss holding stable coins, the lower I've seen them go is 1% loss, around 1$ to 0.99$, that's what you are going to see, stable coins works perfectly ok and thanks to them they makes trading more interesting and easy

I am contributing to this space by educating and sharing information. There is a loss holding a stablecoin. It's called inflation. Currency is not meant to stand still. Currency is meant to circulate. Currency is not a financial asset. It's a medium of exchange. The word currency itself means literally "in circulation"

This is not a big deal IMHO. You are just making small things bigger. Of course there is no absolute stable in currency since explain it already that inflation affects it. But if you observe how much percentage of variance from 1$ here then you can see it's not a big deal compared on the volatility of other crypto currency. So it's safe to sat that's it really stable in crypto world.

And also the price varies up down near 1$ so it means that there's always a time that it's break even. So if we average the price, it will come up near 1$ and that's what it makes stable.

[dragon695]

I agree that Stablecoins is not 100% perfectly stable, cryptocurrency is definitely volatile. USDT also will not always be priced at $ 1,
USDT will move to $ 0.95 or even go up to $ 1.1. It depends on supply and demand, but at least it will not move far from $ 1. Compared
to cryptocurrency that is not included stablecoins, so if the assets we want to safely store in stablecoins are still the best choice.

True! It's obvious that there has to be volatility in this market. That's why we can earn profits out of it. The "stable coins" are the coins that has the ability to be as stablest as possible compared to other coins in the market. It provides us a way to store our capital and investment when the market is too volatile. However, it has to be some fluctuations. Even with the fiat money in the real world, the exchange rate between national currencies has to be changed every minute.

[Gayong88]

A cryptocurrency being a stablecoin does not mean that the price is literally perfectly stable. It means that there's an effort to stabilize the price as much as possible. Different stablecoins use different methods to stabilize their price. Some peg the value to some other relatively stable asset like the dollar, gold or sliver. Others attempt to stabilize the price themselves by regulating the circulating supply in relation with market capital so that the price stays stable.

For Stablecoin prices it is relatively stable, even if there is a change such as an increase in BTC prices. for Stablecoin is relatively not much change and for those who want to invest with a small risk level, they tend to choose those whose asset values will not change much in the future.

[joseyphil82]

Stable coins fluctuates, how is this a problem because the price fluctuations is not even that much, the price is not hurt with this fluctuations, they did what they are built for smoothly with no problem, If that little fluctuation is the reason why you create this post OP sorry it doesn't count

[Ridwan Fauzi]

I just wondering, if bitcoin price just up and down like $9200-$9700 can we say it as stable?

I think this is what happen in stable coin or as we can say it as money fiat. The money fiat price movement only in several range like I said above unless there is a good and bad thing happened from its country, most likely its price will move a lot.

You have to compare stable coin price movement and crypto currency price movement. Like in bitcoin price movement, yesterday bitcoin price only $9200 and now its price has been traded at the range of $9400 and that thing is not stable and this thing doesn't happen in money fiat.

[mersal]

We can see lot of new stable coins in the market after huge bump on tether's trading volume and different coins says they are backed up by different assets.Most likely all are same and every coin has risk while holding them for long time.Also many scam coins entered into the market with the name of stable coin so don't trust every stable coin, just use the one with enough trading volume for holding your profits for short term period.

[Peanyut991]

Yes you are absolutely right, but the perfect thing is very difficult to find even in conventional money. I think stable coins in cryptocurrency so far like USDT or Tether can be considered stable even though they are not perfect.

[memed97]

I think Stablecoins are a form of safe savings and value transfer but I advise everyone to use the dollar-backed ones because their acceptance would be practically worldwide but as a trade it doesn't work because their gains are minimal and also the chance to liquidate their assets without major losses in a bull run hold 50% of your profits in USDT for example

It's amazing, it's still a newbie but already knows how to give good advice to everyone, but you also have to know that the people here already know about stable tokens supported by the dollar, because USDT has long been born for cryptocurrency.

[Taufik blackspade team]

Yes you are absolutely right, but the perfect thing is very difficult to find even in conventional money. I think stable coins in cryptocurrency so far like USDT or Tether can be considered stable even though they are not perfect.

however, USDT is crypto. they have an exchange rate that is sure to change with other currencies. but compared to other cryptos, maybe stable assets are excellent for traders.

[masterrex]

FreeStreamer what's up with you and stablecoin? Lol anyway, there is no loss holding stable coins, the lower I've seen them go is 1% loss, around 1$ to 0.99$, that's what you are going to see, stable coins works perfectly ok and thanks to them they makes trading more interesting and easy

I am contributing to this space by educating and sharing information. There is a loss holding a stablecoin. It's called inflation. Currency is not meant to stand still. Currency is meant to circulate. Currency is not a financial asset. It's a medium of exchange. The word currency itself means literally "in circulation"

Yes, I agree with your baseline it makes sense, the stable coin is not just perfectly stable because it was affected also by inflation/fluctuation in the market. if we are going to compare the fiat with the cryptocurrency stable coin I think there is a slight difference between the two currencies. While the cryptocurrency stable coins like the USDT are back up with a stable asset like a fiat (US$) or even the Digital Gold which is back up by 1gram of Gold(Au) and other stable assets to make it more stable. but in the end, it was not perfectly stable.

[yhiaali3]

Stablecoins like USDC and USDT are very popular as they are considered a safe haven in the event of a decline in the market as their value remains almost constant and equals almost the US dollar.
Although the Stablecoins has a great benefit in maintaining the value of the coins when the market falls, but in my opinion it is not good for trading and making profits because its fluctuations are very small and do not allow you to obtain large profits. Therefore, when trading, it is best to use volatile and unstable coins because the profits are high.

[DarkDays]

Nobody expects stablecoins to be absolutely stable—nothing ever is.

Even if the stablecoin is pegged to the USD, EUR, JPY etc, the value of these changes over time with inflation and other macroeconomic factors which affect their purchasing power.

If stablecoins were truly stable and absolutely pegged to USD with no room for fluctuation, then I think they'd be less popular, since trading volumes would slip since arbitrageurs would no longer be interested in them.

If you want something truly stable, better design it yourself because no current system fits the criteria as you describe it.

[Mrchristo]

For gold backed coins, they also need to maintain the amount of gold equal to the value of their issued coin or a larger escrow.

I'm interested in knowing more about this gold backed coin. Is there any verified or legit coin that is backed with gold?

Most times, I tend to consider project claiming to have their tokens backed by gold to be mischievous as there may not be any substantial means of verification to ascertain the quality and amount of gold involved.