We are all familiar with the term stable. A stable coin in the crypto market is a coin whose price does not change. Whereas Bitcoin fluctuates, it remains unchanged in terms of price. It is currently a coin that helps thousands of investors keep their assets holding a certain value. The price of a stablecoin does not change at all, and if it does, it is negligible. In a word, we raise the price of all coins except stable coins. Today we will discuss the pros and cons of this coin. Let's take a look at the advantages and disadvantages of stablecoins.
Advantages of Stablecoin
- The price of such coins is generally stable. For example, when a trader wants to trade their products in cryptocurrency, the trader may face losses due to fluctuations in the price of Bitcoin or other coins. Therefore, he can stock up on stablecoins to protect against losses. Because it doesn't fluctuate like other coins. So it's safe to say it's much safer to keep the original value.
- Such coins are very helpful for traders. As cryptocurrency prices soar, traders have no choice but to use stablecoins. Because this coin plays an important role for a trader to keep his complete safe and balance.
- These are backed by dollars or other currencies or other commodities, making them less likely to become worthless. As a result, such coins can be said to be very safe. So it can be said to be the safest for traders.
- One of its advantages is that it can be exchanged instantly on the blockchain. Traders can exchange such stablecoins on any blockchain. Moreover, other coins can be bought and sold very easily through this type of stable coin.
Disadvantages of Stablecoin
- Although there is a pledge to put something as collateral against the stablecoin, we are not sure how true this is. Because it is very difficult to prove its authenticity. As the USDT has never fully disclosed their collateral accounts.
- While stablecoins are always supposed to be stable, sometimes they aren't. Sometimes their prices are also seen to be huge. As we have seen over the last few months how the USDC has lost value. Exactly the same thing happened with USDT. Also, stablecoins often fall in price, sometimes rising.
- Another disadvantage is that most stablecoins are centralized. As a result it is regulated by certain authorities. As a result, there is nothing to be surprised if it disappears from the market or suffers a major decline.