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But there's literally no upside to holding stablecoins? By design they don't appreciate, they pay no interest or dividends, they track underlying inflationary
by Clewza313 5y ago
But there's literally no upside to holding stablecoins? By design they don't appreciate, they pay no interest or dividends, they track underlying inflationary currencies like USD, and have a non-zero chance of going boom and becoming worthless.
- wskinner 5y agoMany exchanges pay interest on stablecoin deposits.
- dmurray 5y agoThey're not perfectly stable. The issuer guarantees you something about them: maybe that you can redeem it for $0.95 today (perhaps phrased as $1 minus fees), or $1.0 in a year. So the price will fluctuate a little below $1, based on interest rates, creditworthiness of the issuer, and simple supply and demand. This is exactly like a bond. The trade is to buy the stablecoin at $0.96 and wait for a chance to sell it at $0.995. Your investment thesis is that someone else is selling at $0.96 not because the issuer is going bust, but because they need the funds for something else.