DeFi & Yield

What is a stablecoin depeg and why does it happen?

A stablecoin depeg is when a stablecoin trades meaningfully away from its target value, usually one US dollar, instead of holding steady. It happens when confidence in the backing breaks down, reserves are questioned, collateral falls faster than the system can respond, or heavy selling overwhelms available liquidity. For example, a coin meant to hold a dollar might trade at ninety cents during a market panic as holders rush to exit. Depegs can be temporary or permanent, and losses are real, so no stablecoin should be treated as risk-free. Reading the mechanism before the marketing is the discipline we bring to crypto at Qatobit. See our research.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.