How stablecoins remain stable

It seems that one of the defining characteristics about the cryptocurrency market is its volatility - i.e. the price of cryptos zigzag up and down, driven by investors’ sentiment as their prices are arguably undetermined by the tangible assets that backed them. Supply and demand, market mood, past events, potential future adoption rates and other related factors impact how much a crypto’s price erratically gyrates. Arguably, many cryptocurrencies have been driven by fear of missing out (FOMO) or simply pure greed as investors have searched for the next Bitcoin or XRP (XRP rose by 38,000% in a year!). Although hindsight makes it easy to be wise after the event, investing is fraught with the challenges of ‘picking a winner’ - whether that be a house or a share, let alone deciding which of the 23,000 odd cryptos to select. Traders and investors have to either commit to a protracted wait until values recover, or sell their coins for fiat as soon as the prices started to decline. Given the…