1 min
Why Stablecoins are almost always a bad investment - Crypto in Plain English - Episode 171 - by cryptohunt.it Crypto in Plain English - by cryptohunt.it
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- Investing
Why Stablecoins are almost always a bad investment
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
As an avid listener of this podcast, you will have noticed: We have spent a lot of time explaining stable coins. This is somewhat of a passion for us: We love the idea, but we think the risks are not clearly communicated.
So, what makes stable coins so risky? They are, after all, stable right?
And that’s the problem. In theory they do represent a value that only fluctuates minimally. But many stablecoins have fundamental flaws: They may not be fully backed. Or their algorithms don’t hold up under pressure.
Whatever the risk, the most important thing to realize is that there is no reward by design. You will never get MORE for them than you paid. But they can collapse, like TerraUSD did. And let’s take another look at Tether USD: The company refuses to tell you where the money is parked, yet it is the third largest cryptocurrency in the world.
We want you to consider this: Risk with no reward. Is it worth it? We think maybe, for temporary money transfers or payments, but not to hold. But as always, do your own research - we are not here to give you investment advice, we want to teach you the basics to make the best decisions possible.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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Send in a voice message: https://podcasters.spotify.com/pod/show/cryptohunt/message
Why Stablecoins are almost always a bad investment
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
As an avid listener of this podcast, you will have noticed: We have spent a lot of time explaining stable coins. This is somewhat of a passion for us: We love the idea, but we think the risks are not clearly communicated.
So, what makes stable coins so risky? They are, after all, stable right?
And that’s the problem. In theory they do represent a value that only fluctuates minimally. But many stablecoins have fundamental flaws: They may not be fully backed. Or their algorithms don’t hold up under pressure.
Whatever the risk, the most important thing to realize is that there is no reward by design. You will never get MORE for them than you paid. But they can collapse, like TerraUSD did. And let’s take another look at Tether USD: The company refuses to tell you where the money is parked, yet it is the third largest cryptocurrency in the world.
We want you to consider this: Risk with no reward. Is it worth it? We think maybe, for temporary money transfers or payments, but not to hold. But as always, do your own research - we are not here to give you investment advice, we want to teach you the basics to make the best decisions possible.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
---
Send in a voice message: https://podcasters.spotify.com/pod/show/cryptohunt/message
1 min