Stable Coins Aren't Stable

There is no such thing as a stablecoin or stable coin however you want to say it. There are 2 big reasons for this. The first is they are traded. Nothing that is traded in the crypto world (and probably any other) is stable. At any time a big actor or event can drive the price up or down. We have seen this with the Steem Backed Dollar. It's supposed to be around $1 but due to the run up in crypto prices it hit over $12. This was due to people just buying anything without knowing what it was. So in this case an event. The same thing could happen with one big actor buying or selling a bunch at one time. This could cause more buyers to do the same thinking something was going on or a panic sell. Same goes for any other stablecoin like tether. We say a bit of this last night when it lost it's peg.

Second is all these coins are pegged to an unstable asset to begin with. The whole point of bitcoin was to get away from the unstable inflationary dollar. Now we have these coins pegged to it. Hold these and over time you will loose money over time even if they don't crash.

Maybe we need a new term for these. Stable they will never be. Well unless something stable is found to peg them to. Pretty hard to peg things to something like vibrations of cesium though...