Stablecoin price becomes unstable due to Bitcoins price fluctuations
http://bit.ly/200319_ENIt seems that stablecoin (substitute for the US dollar in the crypto market) prices become unstable during huge Bitcoin price fluctuations.
According to crypto disclosure platform Xangle, there were 58 cases confirmed since 2015 when the stablecoin USDTs prices fluctuated by a maximum of $0.05 within 24 hours. Out of the 58 cases, there were 17 cases where Bitcoin prices fluctuated by more than 10% and 36 cases when Bitcoin prices fluctuated by more than 5%.
This is allegedly because some exchanges do not allow the withdrawal of fiat currencies; hence the only way for investors to cash out Bitcoin is by buying stablecoin. On the other hand, investors might have preferred USDT over fiat when Bitcoins price was undervalued, resulting in an overdemand of USDT.
Don't make shortened URL links, they're not welcomed here. If you're talking about Tether, then I don't see it becoming unstable yet. It's always around $1 whatever happens, and that's the point of it. I mean the lowest it got during this bearish trend is down to $0.96, whereas Bitcoin went from almost $10k to less than $5k, so I don't think that the comparison makes sense here. Tether is centralized and risky because it might explode anytime, but nobody knows when it's going to. But since it's directly under control, just like fiat, it does not get affected by what happens to the market of decentralized currencies.