Myth vs fact: "a stablecoin is always worth $1" 🧐
Myth: one stablecoin is as good as another, the price never moves.
Fact: a stablecoin holds its peg only as well as whatever backs it.
🔹 May 2022: UST, an algorithmic stablecoin with no cash reserves behind it, broke its peg and collapsed close to zero within days.
🔹 March 2023: $USDC traded below $0.90 for a weekend after part of its reserves got stuck at Silicon Valley Bank. It recovered once the deposits were secured.
What I check before parking money in one:
🔹 What backs it: cash and short-term treasuries, crypto collateral, or just an algorithm
🔹 Whether the issuer publishes regular reserve reports
🔹 How deep the trading pairs are if I need to exit fast
Which stablecoin do you actually trust to sit in? 👇
#Stablecoins #cryptoeducation #USDC #crypto #Binance
Myth: one stablecoin is as good as another, the price never moves.
Fact: a stablecoin holds its peg only as well as whatever backs it.
🔹 May 2022: UST, an algorithmic stablecoin with no cash reserves behind it, broke its peg and collapsed close to zero within days.
🔹 March 2023: $USDC traded below $0.90 for a weekend after part of its reserves got stuck at Silicon Valley Bank. It recovered once the deposits were secured.
What I check before parking money in one:
🔹 What backs it: cash and short-term treasuries, crypto collateral, or just an algorithm
🔹 Whether the issuer publishes regular reserve reports
🔹 How deep the trading pairs are if I need to exit fast
Which stablecoin do you actually trust to sit in? 👇
#Stablecoins #cryptoeducation #USDC #crypto #Binance