Topic: Are stablecoins a definite solution against a bear market? (Read 1344 times)

I can't say they are the definite solution against bear market because holding stablecoins comes with their own issue such as holding and BTC makes a good move you ends up losing. However I can only say that, during bear market and as unpredictable as it is, stablecoins can or are the only way to be at the safer side, that is hedging your funds. And now with fiat being supported by exchanges most people can even convert to fiat to wait out the bear market although it also has its shortcomings as the person might end up spending the fiat. So from all angles, during bear market decisions are made and they all falls down to how to secure your funds of which stablecoins offers the shortest and fast solution.

I also think that stablecoins like tether (USDT) can be a savior of our coins when the bear market. Because only stablecoins the price is
not affected by the bear market. So from that it is not surprising if we see data on the coinmarketcap site tether volume bigger than bitcoin.
Because there are indeed many investors who rely on USDT to save their capital so as not to be depleted by prices cryptocurrency is very
volatile. And when we trade even stablecoins very good as pairing, because it can save profits obtained safely.

Yeah, your correct, many investors after a series of market crashing they tend to swap their coins to stablecoins to secure their investment funds still. Stable coins are useful when scenario of these sharp fall happen to the cryptocurrency market. Most of my trials times in investment into cryptocurrency always end in swapping to stable coins when the market seem dumping without as rise within some weeks.  This gas been one of my best option minimize my loss.

In some way, stablecoins prove to be useful to protect one's investment against a bear market. But be aware that you cannot rely on them as a "definitive solution" since their value is not guaranteed to be always worth $1 USD across the market. Only those which are thoroughly regulated by the government, will be able to keep their promise for the foreseeable future.

I often find exchange-issued stablecoins to be much more reliable than those which are dependent on algorithms collaterized by blockchain assets (like DAI, cUSD, etc.). That's because stablecoins issued by major exchanges like Binance and Gemini are regulatory-compliant. Since DAI and cUSD are decentralized, there's no legislation that would enforce the issuer to maintain the value of these assets to $1 USD. Consider NuBits that was once a decentralized stablecoin with a value of $1 USD. It turned out to become a failure after a couple of years since inception. Investors who've invested a lot of money into it, have experienced unrecoverable losses. Imagine if all unregulated stablecoins turn out to become worth less than $1 USD? It'll be a complete disaster for the crypto market!

Still, I'm confident that the stablecoin industry will thrive within the mainstream world once serious investors and traders adopt them for their own benefit. We need this to become a fully-regulated industry in order to bring legitimacy to stablecoins across the crypto market. With Facebook's announcement of the Libra stablecoin, governments have begun taking their due diligence in order to regulate the stablecoin industry more thoroughly. If successful, you could expect stablecoins to last a lifetime. As long as their value is always $1 USD across the market, you can use them as a "definitive solution" against a long-lasting bear market. Just my opinion

They might not be the definite answer or solutions per say but at that point in time they are certainly the way out since bear markets comes with uncertainty; that is, can hardly be predicted how long it will last. Bear markets are some of the phases which can't be overlooked and no one can stand to watch his assets go down badly without taking neccessary actions towards it unless the person is holding a coin like Bitcoin which he aims to hold for long. But for other altcoins which can't be easily banked on converting to stablecoins is the best. Lastly, there were projects which went terribly down during bear market and never rose up again, holders can only but wish they converted to a stablecoin. So to answer your question, stablecoins are the solutions and best way out when unfavorable market hits.

That's certainly true, mate. Not all that glitters is gold. In other words, not all stablecoins are worth the investment these days. There are some which are highly manipulated by the issuer, leaving them the ability to freeze a person's balance at will. It's best to look for stablecoins that comply with regulations in every way, allowing people to take control of their money at the same time. Usually, exchange-issued stablecoins are the best ones to deal with. Binance USD and Gemini Dollars could last a very long time as they're backed by trusted exchanges in the crypto space. Others that are based on an algorithm collaterized by a Blockchain network's utility token, could lose their value of $1 USD per coin in the future (like Multi-collateral DAI and Single Collateral DAI).

Investing in the right stablecoins will allow you to preserve your investment in a never-ending bear market. We're still in a bear market today, since Bitcoin and other major cryptocurrencies have been unable to get past their ATHs across the crypto market. With every small pump in price (like the ones we've been experiencing lately) you could sell some crypto into a stablecoin of your choice to prep yourself for another dip in price. Once prices start declining across the crypto market, you could easily sell some of your stablecoins back into a crypto of your choice to earn more coins at a lower price. Repeat the process, and you'll be able to have a steady financial life for the foreseeable future.

Nonetheless, stablecoins are a good solution for a bear market in the short-term. In you're looking for a safe and secure way of protecting your investment for the long term, then look no further as Fiat is the best solution against a bear market. It depends on the specific person's needs whenever he/she wants the convenience of the Blockchain with the stability of Fiat or all the other way around. As long as the industry is regulated, there should be nothing to worry about. Just my opinion

but with a coin model like that the benefits are very little because it does not have a good price movement and there is not too much demand so that the price conditions at the exchange will remain stable, if you choose such a model it is difficult to be able to profit even though the risk of loss is small.

On the off chance that you have decided to hold stablecoins, at that point the market is right now entirely eccentric and at an exceptionally high danger of breakdown, so we needn't bother with the experience or information to sell tokens. The determination of hold stablecoins is just a transitory measure and encourages us not to lose cash in the bearish market

For every dump in crypto sphere there is always a reciprocated pump,  stable coin might be the best solution against bear,  but knowing the right time to go in and out is the aspect of it because if your assets are locked in stablecoins, you'll definitely loose the opportunity to capitalize on pumps. So to certain extent, I'd say stablecoins isn't much of a thing for swing traders as they can easily loose profits if their assets are lock in it.

I believe that stable coins are the best solution to counter the bear market. However, it cannot be said that past failures, for example, 2017 when people did not have time to sell cryptocurrencies purchased on time, are connected with the fact that there were no stable coins on the market. They attended at least one. So the reason is in the people themselves.

Yes I think so, at least at the moment where there is a bear market the best is to convert to stablecoin thereby guaranteeing that you are not in the lossing side. This is certainly what most if not all users do, and also even when holding it one can still look to invest in other coins which can bring a short profit. In addition, during trading most traders also holds their profits in stablecoins. Thus, one can't be mistaken for saying that YES, stablecoins are the solution one can lay hands on during a bear market.

Stablecoins is very useful on bear market but it depends on the stablecoin, dont hold it in a cold wallet some stablecoin has the ability to freeze our wallets , only DAI does not have those abilities. But if you are using it in day trading in a trusted exchanges I guess it is fine. USDT has been accused of pumping BTC and dump it later.

Yes, when the bear market comes, holding a stablecoin in your hand is indeed a very good operation. You can use the stablecoin in your hand to buy the coins you want in a bear market. It is indeed a good way to deal with the bear market. However, we need to be careful that the stablecoin in our hands will not run away, otherwise we will really lose everything.

Exactly. There's no doubt in that. I've seen many stablecoins to be backed by real dollars (or sometimes even bullion), without substantial proof whatsoever. Tether (USDT) has been quite a shady stablecoin as the company was unable to provide proof of its claims that the token was backed by real dollars. A legitimate company would provide transparency to its investors in order to maintain the reputation of its token within the mainstream world. Remember, "all that glitters is not gold". Many people believe that all stablecoins are guaranteed to be worth $1 USD for the foreseeable future. But we know that's not the case.

A true stablecoin needs to be backed by real USD reserves and largely regulated by worldwide governments. Only a few stablecoins meet with these requirements. Stablecoins like the Gemini Dollar, Binance USD, and IBM's stablecoin solution (I believe it's called Stronghold USD), are truly regulated and backed by USD reserves. But stablecoins which rely on algorithms to sustain their value of $1 USD (like Maker's DAI or NuBits) will eventually fail because they're not backed by real dollars. Consider NuBits (USNBT) which was once a respectable stablecoin (being worth $1 USD most of the time) some time ago. But, its failed economic model and management has led it to be worth cents instead of $1 USD. Many investors who put their faith into NuBits are now regretting having to put all their money in a stablecoin that was supposed to be always worth $1 USD.

Nonetheless, stablecoins are still good for short-term protection of your investment. But they're not a definitive solution against a long-running bear market. You're better off cashing out your crypto into USD for safekeeping. Until the space becomes more regulated, you cannot expect stablecoins to have a guaranteed value of $1 USD across the market. Just my thoughts

That is, if the stable coin you are holding has real backing of assets. Remember, USDT before, they admitted that it was not fully backed by USD. What if you are holding a different stable coin other than USDT? Do you really think that stablecoin has their assets to back up when something goes awry?

https://breakermag.com/tether-now-admits-its-not-fully-backed-by-dollars/

That's certainly true, mate. Stablecoins are more regulated than traditional cryptocurrencies being traded on the market today. This is great for the mainstream adoption of crypto and Blockchain technology as institutional investors will be able to gain the advantage of traditional Fiat and crypto at the same time. I believe that a stablecoin provides far better use cases than Fiat itself.

By leveraging Blockchain technology, stablecoins are able to provide a solution for traders, investors, and individuals alike which is censorship-resistant and tied to the value of $1 USD. Not all stablecoins are perfect, but they seem to be improving every step of the way. With enough demand for stablecoins, they'll be here to stay for a long time. As long as they're able to retain their value of $1 USD per coin, they'll prove to be extremely useful at times where crypto prices are declining at a fast rate. It's much more convenient to save your money on a stablecoin than a bank account directly. My main concern is their long-term price across the crypto market. If stablecoins remain stable in price forever, then they're the definitive solution against a bear market. Otherwise, you'll be better off cashing out your crypto into Fiat for safekeeping.

Nonetheless, time will tell us if stablecoins will survive or not. Everything will depend on government regulations and mainstream use. If regulations become too fierce, I doubt stablecoins will take off in the mainstream world. The same thing could be said if adoption for stablecoins is low. With Facebook's announcement of Libra, the world is becoming aware of stablecoins as the perfect solution to crypto's volatility and traditional Fiat. Just my opinion

I see stable coins are more regulated compared to investment cryptocurrency. Though, they are called investment, stable coins are more suitable in terms of business investment and day to day transaction. But if we think about the bear market, the function of a stable coins turns out to be the savior of a fallen cryptocurrency market in a short term, and investors think it might be a safe haven. Which indeed for me is true. Stable coins do really serve as the solution to save the profit, but is not a solution to stop and make the bear market bull again.

Agree. There's always a risk involved when trading crypto. After all, prices are extremely volatile across the market. Thanks to the introduction of stablecoins, people can obtain the convenience of the USD's stability and the censorship-resistant design of crypto. While the concept is still relatively new, cryptocurrencies that are pegged to the value of $1 USD serve as great alternatives to mainstream Fiat. At times, prices may go a little lower than $1 USD giving you the opportunity to "reap the profits" within a short time frame. Tether, bitUSD and several other stablecoins have a small fluctuation in price at times where the bear market is threating most cryptocurrencies' prices among popular exchanges.

Of course, we cannot rely on stablecoins in their entirety as they're not guaranteed to secure one's investment for the long term. For this, the real USD is the winner. You can simply cash out your crypto to USD with your bank account to completely secure your investment. If stablecoins decline in price within a short time frame, you can use the money from the bank to buy more coins and sell them once everything heads back to normal. Repeating the process should allow you to maintain your investment even when a bear market threatens the entire crypto space.

Nonetheless, with the introduction of a regulatory framework for stablecoins, it seems that they'll be here to stay for a very long time. The industry is ripe for innovation in every way possible. Once serious investors see stablecoins as a "safe haven" alternative to the real USD, they'll join the crypto space in mass. As a result, we'll see a higher market valuation for crypto faster than you could imagine. Hence, stablecoins are the most definite solution against a bear market for investors, traders, and the average Joe. Just my thoughts

For me, due to the personality I do have, I would still consider having and holding into cryptocurrency despite of the bear market that we can experience in no time. I know the risk being associated on getting into this industry I am currently into and for me, I do love taking risks and challenges which I can acquire on staying with cryptocurrency. Although stable coins can do provide me stability in terms of price, I think it is just like having fiat on my hand that just take small improvement which is for me looks ordinary and boring. But I do consider having stable coin at the same time keeping in hand my cryptos. Bear market have lots of lessons to teach us so we must not be afraid on being in a situation like that because it is just a normal scenario we must take to be able to improve our intellectual capacity and at the same time seein a world out of our boxes.

In additional, I would to say, without the option to close your positions without getting back to Fiat, Crypto will never hit mainstream. The problem is that there are no easy to implement solutions, USDT is not safe enough, and the likes of Basis even if they deliver are too complex for the average joe to understand. Making a crypto equivalent of fiat and calling it stable is about as absurd a concept as I could think of. The sooner the speculators are ejected and people just start spending crypto, the more stable it will become. If that means a price crash then so be it.