Stablecoin
Basics
What it means
A cryptocurrency designed to maintain a stable value relative to a fiat currency like the US Dollar. Most stablecoins aim to keep a 1:1 peg with their target currency.
Example
USDT (Tether) and USDC are two popular stablecoins designed to maintain a value of $1.00 per coin.
Mistake beginners make
Beginners assume stablecoins are always worth exactly $1.00. Stablecoins can "depeg" in extreme market conditions. High-profile depegging events have caused investor losses.
Related terms
- Spot Trading — Buying or selling a cryptocurrency at the current market price for immediate settlement. W…
- Liquidity — How easily you can buy or sell an asset without moving its price. High liquidity means lar…