How can investing in stablecoins mitigate market volatility?

economictimes.indiatimes.com:

stablecoins during such times.What are Stablecoins?Stablecoins are cryptocurrencies designed to maintain a stable value, typically by being pegged to a stable asset such as the US dollar. Investing in stablecoin can help mitigate market volatility because they are less susceptible to price fluctuations than other cryptocurrencies such as Bitcoin or Ethereum or any other.How can Stablecoin mitigate market volatility? Stablecoins can mitigate market volatility to some extent. 1. It can help in hedging against volatility

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Investing in these can be a way for investors to hedge against volatility and reduce their risk exposure. By holding stablecoins, investors can protect their portfolios from sudden drops in the value of other cryptocurrencies or traditional assets, providing a haven during market turbulence. As stablecoins like Tether or USDC are pegged to a stable asset, their value remains stable. Therefore, if the value of Bitcoin or Ethereum drops suddenly, investors can move their funds into stablecoins to protect their portfolio from further losses. This strategy is known as «hedging,» which involves offsetting potential losses in one asset by investing in another asset that is expected to hold its value or appreciate. For instance, during the global pandemic in 2020, traditional markets experienced significant volatility, and investors turned to stablecoins to safeguard their investments. As a