@neldathorntonu0
Stablecoin peg stability is essential for market trust. When a stablecoin briefly loses its peg to the U.S. dollar, even by small margins, it sparks fear of contagion across DeFi and trading platforms. Large deviations, as seen in past depegging events, can trigger liquidity crises, liquidations, and sharp declines in related assets. Traders monitor stablecoin health to assess systemic risk. Confidence in a stablecoin reinforces overall stability, while doubts drive investors toward alternatives. Because stablecoins underpin much of crypto liquidity, their peg strength directly influences both short-term sentiment and the resilience of broader market infrastructure.
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