Stablecoins Explained: How They Hold a Dollar (And When They Do Not)
Stablecoins are the plumbing of crypto. Understanding how each type maintains its peg tells you which risks you are carrying.
Fiat-backed stablecoins
These hold reserves in cash and short-term treasuries. The risk is custodial and regulatory, not algorithmic.
Crypto-collateralised stablecoins
Backed by over-collateralised crypto positions. They are transparent on-chain but vulnerable in violent crashes.
Algorithmic stablecoins and their history
Designs relying purely on incentives to maintain a peg have repeatedly failed, most infamously in 2022.
Depegs are usually liquidity events
A stablecoin trading at $0.98 often reflects a temporary imbalance rather than insolvency — but the distinction is only clear in hindsight.
The mistakes that cost the most
Treating every notification as requiring a response. An alert is information, not an instruction, and most of them should end with you doing nothing.
Reacting to a move without checking what caused it. A fall that happens while the whole market falls is a different event from a fall that happens alone, and the correct response differs completely. Checking correlation first takes ten seconds and prevents most panic decisions.
Changing the plan mid-move. The level you chose while calm is better than the one you will choose while watching a candle. If you find yourself widening a stop or moving a target during volatility, that is the moment to close the app rather than the moment to act.
Never reviewing. Most people set up the fundamentals once and never look at whether it worked. A short monthly review — what fired, what you did, what you would change — compounds faster than any refinement of the setup itself.
Never miss a move in the markets you follow
Pick a price or a percentage, choose push, Telegram or email, and let it watch around the clock while quiet hours keep the night to yourself.
- Fires about a second after the price hits
- Runs on our servers, so it reaches you with the app closed
- Free for 3 alerts — no card, no account
Download the app for real-time notifications
Frequently asked questions
Does this apply to stocks and commodities too?
The method does; the numbers do not. Levels, sizing and deciding in advance work identically across asset classes, but thresholds must be recalibrated — equities gap around earnings and only move during market hours, commodities trend more slowly, and currency pairs move a fraction of what crypto does, so a 1% move there is significant.
Set an alert for this: forex rate alerts and crypto price alerts, or every market and alert type. Choosing an app? How the alert apps compare, from their own pricing pages.
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