Stable coins can also destablize a currency. This especially true when the stable coin's value is guaranteed by the base currency.

As a coin rises, many investors will convert the base currency into the stablecoin. This reduces the float of the base currency and causes it to rise further.

When the price of the base currency tumbles, users are prone to convert the stable coin back into the base currency. This increases the float when the support for the coin is weak.

In this scenario, the conversion process pushed up the price of the coin during the pump and decreased the value of the coin during the dump.