Safe-Haven Assets:

USDC/USDT: Dominant during downturns due to liquidity and 1:1 fiat backing. Traders pivot to them to preserve capital amid BTC/ETH swings.

Algorithmic Risks:

Coins like DAI (partially algorithmic) or Frax face depeg threats if collateral (e.g., ETH) crashes. Terra’s UST collapse underscores systemic fragility.

Tactical Use:

Hold USDC/USDT for short-term stability; diversify into yield-bearing options (e.g., Maker’s DSR) in calmer markets.

Avoid algo-stables during high volatility unless audited and overcollateralized.

Key Insight: Fiat-backed stables remain the volatility shield; algorithmic variants demand extreme