🟢 Crypto Trading Series – Lesson 10: What is a Stablecoin
💡 Definition:
A stablecoin is a cryptocurrency designed to maintain a stable value, usually pegged to a fiat currency like the US Dollar ($USD), Euro (€), or other assets. Examples include USDT, USDC, BUSD.
⚡ Why Stablecoins Exist:
They provide a safe haven during market volatility.
Traders can move in and out of positions quickly without converting back to fiat.
They are essential for DeFi platforms, payments, and liquidity pools.
📊 How They Work:
Fiat-backed: Each coin is backed 1:1 by actual currency held in reserves.
Crypto-backed: Collateralized by other cryptocurrencies with over-collateralization.
Algorithmic: Uses smart contracts and algorithms to maintain value.
🎯 Why Traders Should Care:
Protect profits during volatile markets.
Act as a gateway for entering or exiting crypto positions.
Important for earning yield in lending or staking without risking high volatility.
💡 Pro Tip: Not all stablecoins are created equal — always check the issuer, backing, and transparency before using one.
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