Isn't it risky to hold your bitcoins in stablecoins?

I've come across some threads where people mention selling off their crypto, like bitcoin, expecting a market drop. Or folks who snagged profits when it hit over $100k and likely switched to stablecoins like USDT. So, for those who did that, doesn't it worry you to keep your funds in USDT, which is basically like using a bank, especially during a bearish bitcoin phase that could drag on for years? I mean, stablecoins aren't that different from traditional banks, but at least in a bank, your deposits can be insured. If things go south, who knows what might happen with stablecoins? Let me ask again: how do you keep your cool about storing your assets in stablecoins for the time being? We all remember what happened with UST and LUNA in the Terra ecosystem, right? To me, holding your assets in stablecoins feels like skating on really thin ice. You could go through at any moment. What do you all think? P.S. Tether (USDT) says it's finally gonna get an audit, something they've been promising for five years now. They're planning to have KPMG look at the financials and PwC check their internal controls. But what if that audit uncovers some shocking info that could take this stablecoin down? Just a reminder, Tether has never done an audit before, so who knows what's actually happening behind the scenes?

Long term holding of such stablecoins as USDT is risky action since, unlike regular banks, where government promises the bank, the stablecoins are just based on honesty and cash savings of company. Although Tether is finally receiving a thorough check in 2026 by companies such as KPMG and PwC, it still carries risk that their billions of savings have been invested in risky projects instead of safe cash, and result will be crash just like that of Terra/LUNA. Some new laws, such as GENIUS Act, try to make these coins safer, however, they also allow governments to stop your funds, and this is what takes away from Bitcoin the freedom it usually offers. To remain safe even in long market crash, smart investors do not lock their funds in stablecoin safe. They keep their funds in other coins, such as USDC and DAI, or move their funds in controlled bank accounts or gold in case any company fails.

I am afraid of holding tether and other stable coins. That’s why I don’t hold them. I would rather hold btc and have unrealized gains there instead holding centralized usdt and get robbed by tether & co. If you are willing to reduce your exposure to crypto or btc, tether is not the safe destination. For short term it might act alright but I wouldn’t wait usdt for more than a month. Way too risky.

Terra USD was backed by LUNA, which was backed by nothing. They did have a reserve of Bitcoin to try and protect the peg, but its total value was much smaller than the amount of UST in circulation. Tether’s USDT is presumably fully backed and isn’t some untested experimental ponzi. There are definitely still risks with USDT, but there isn’t the same level of worry that it might suddenly collapse. If USDT were to depeg, that would create an arbitrage opportunity where people can buy it for less than $1 and then redeem it for its full value. Eventually, this arbitrage should bring it back to $1. The fact that it hasn’t collapsed or depegged for a prolonged period gives people confidence that it actually has full backing.

Yeah, UST was very different, USDT is more about backing and trust. It’s held up so far, which is why people still use it, even on platforms like bitcoinbetting.

This practice is taking profit with your bitcoin for having stable coin and store your fund in stable coin. It's not like storing your bitcoin in stable coin or storing your bitcoin in fiat currency. Saying like this is very confusing while technically it is inaccurate too. Stable coins have many risks. - Depegs that happen many times with many stable coins. The depeg severity can be mild or severe with a classic depeg failure of Terra stable coin UST 3 years ago. - Fund freeze even in your non custodial wallets. Most Stablecoins Can Be Frozen, Even in Your Own Wallets Stable coin and black lists. Stablecoin Blacklists: How They Work and Who Controls Them. Circle Froze Millions in USDC Across 16 Wallets — Now It’s Rolling It Back.

We can't compare Tether to Luna UST, they are by far different from one another, if Luna went through what Tether's USDT have went through Luna would have burst in a matter of months. I am not confident holding stable coins too but there is no better option, but one thing is certain here, USDT and USDC can't collapse the same time and that's why I seperate my money into both stable coins instead of one. Still I believe that USDT is one of the strongest out there, too many scrunity already and yet they still survives and functioning well, that says a lot about the stable coin project, they aren't too big to fail though but they are worth the risk.

In life, nothing is 100% certain. You have to learn to live with that and still sleep soundly at night. That doesn’t stop you from trying to diversify your investments and exercising a bit of caution. What bothers me most about stablecoins is the depreciation of their value, just like any fiat currency.

Your point that Tether is much safer than failed UST is true because USDT is backed by real money held back instead of being risky plan. Although it is smart idea to spread your money between USDT and USDC because they are safe plan, it should be said that two face different problems. USDC is linked to U.S banking system and rules. But, USDT works outside of U.S with more risk from other countries even after its recent check. I believe that biggest strength of Tether is its huge group of users as main money of crypto world. It will become too big to fail because if it fails, all market will crash. At last, it is smart step to use both in case of banking scare in U.S or new rules in other countries.

dollar, like every fiat currency, is unstable and risky. Most people still do not understand this. Bankers can print unlimited amounts of money, and by doing that they constantly reduce its value through inflation. You may still have the same nominal amount, say $10,000, but year after year that money buys you less goods and services. That is because more dollars are being printed, while the prices of everything around you keep rising.With the same amount of money, you can buy less and less every year. Most people are not even aware of it, but that is exactly what inflation is a silent form of theft. Now add Tether on top of that, which is nothing more than a tokenized dollar, and you are just stacking one layer of fiat risk on top of another. Bitcoin is far safer in the long term because its supply is fixed forever there will only ever be 21 million coins. dollar is probably the strongest fiat currency, yet it still loses around 8% of its value on average each year. Some other fiat currencies lose far more, such as the Turkish lira or the Nigerian naira. In Turkey, inflation has been so high for years that it is almost like hyperinflation. Fiat currency will always be printed in unlimited amounts, because that is how the system is built to keep going. Bitcoin is the opposite there will only ever be 21 million coins, which is why its value rising over the long term is as certain as death. That is why the smartest move is to keep whatever you want to save over the long term in Bitcoin, and not fall for the mainstream media and the propaganda they use to keep people confused and misled.

Well if they have that thinking on which those people think USDT is safe in terms of hardships this shows that they really don't understand well or trust Bitcoin. But if they like to do that way its their choice. Since somehow if Bitcoin pumps and what they anticipate didn't happen they lose good opportunity to ride with that event. Also there's really a huge risk that sudden awful situation might going to happen the same as what happen to UST and LUNA which it badly drops and liquidate lots of people holding those coins. So to avoid having that mistake I'd rather stick on Bitcoin because we all know no one can control it. Then will just get new funds to buy Bitcoin again if market dumps.

You need to study this topic more seriously, because only then will you understand that the dollar and other fiat currencies are not real money, but a credit-based system built on debt. Bitcoin, and to some extent gold, are real money. Most people do not understand this, and that is exactly why they cannot understand Bitcoin.

a collapse of stablecoin wouldn't be abrupt like in just one day, they would likely be slow phase especially if its due to inflation where government will be printing trillions of USD. i don't see this happening  as of the moment but the currencies all over the world will collapse along with it due to the crisis we have these days. but it wouldn't be good to put all your money to stablecoins when you could have stored it in BTC. what is likely to be afraid of when you store your money in stasblecoin is if tether freezes your USDT. this will be tragic in all manner as a investor.

I trust Circle and Tether because they have a very simple and profitable business model they issue tokens in exchange for dollars, and then earn interest on U.S. Treasury bonds. That is exactly why they have no real incentive to deceive users. The dollar itself, as a fiat currency, is far riskier, because inflation can easily spiral out of control and turn into hyperinflation. At that point, prices no longer rise gradually from year to year, but from day to day, and in the end people no longer want dollars in trade, but instead seek gold, Bitcoin, or any other real good.

It's clear that many don't know what Luna truly is, the stable coin from Luna was backed by Nothing. What happened to them is bound to happen, I know a guy in YouTube who predicted that Luna will collapse and it happened, he claimed that it's simple mathematics. You can't run a business based on Ponzi, it's a ticking time bomb, the time will come that it has to collapse, stop comparing USDT to Luna people, they are not and will never be the same. It's completely stupid to hold Bitcoin in a bear market without taking profits, why are you holding then? For fun of it?

Bitcoin is money. It is not a stock, nor just another speculative instrument. That is exactly what most people do not understand. It would take too long to explain in detail here what money actually is, so I encourage you to explore that on your own. You need to go much deeper down the rabbit hole to truly understand it, because once you understand what money is, you realize that Bitcoin is the best form of money the human race has ever had. But since Bitcoin is money, it is important to understand what money is used for, and I will try to explain that briefly. Money has three main use cases. Money makes trade easier because it serves as a medium of exchange. Instead of directly bartering goods for other goods, we use money to buy the goods or services we need. Without money, trade would be much slower and more complicated, because we would have to rely on barter. The second function of money is to serve as a store of value, meaning it allows us to preserve value over time and spend it later. That means the value you earned through your work or production can be carried into the future through money. The third function of money is to serve as a unit of account, meaning it allows us to measure and compare the value of goods and services. Bitcoin is money and it was created to fulfill these three core functions of money, not to be just another speculative asset. It makes little sense to speculate with the best money in the world. Once you truly understand what Bitcoin is, you no longer think about selling it  you think about how to acquire as much of it as possible before other people understand it too.

I agree with you here, as it is still risky to hold funds in stablecoins. But dear, those other coins that you aforementioned are also stablecoins, and I will consider that risky as well. Other than this, Its been 4 year of mine i am here in the crypto space, and from day one, I've been listening to such kind of statements that holding funds in USDT or USDC or any other coin is risky. Then my question here is, where should one move his funds in a liquid form to stay safe from volatility or liquidity? I really don't link tradition banking system and don't trust them. I only withdraw the amount in my bank account that I need on the spot, otherwise I don't hold any money in banks. As we know, banks use our money to strong thier own empire, and what do we get in return? devaluation of currecies overtime by holding them for the long term in banks? That is why I believe that we should hold our money in the form of an asset because when currecy will devalue over time, the increasing rate of the asset will help us to recover our loss in the long term. But still, my question is the same. What is the safest way to hold money in liquid form?

I am guessing that it’s just pretty much the same for others whether or not they store it in stablecoins or fiat. Both will be unsafe especially with how the world is moving these days. Those who store it in stablecoins most likely are still planning on buying some bitcoin later on and they hold stablecoins for convenience.

That's part of the risk some Bitcoiners go through to make more or lose more Bitcoins. I don't always recommend stablecoins, but they can't be ruled out, judging the rate at which people depend on them to carry out most transactions. The stable part is what's giving it power. Remove it, and then it collapses entirely. Since they can't be ruled out, then I think if you must preserve a transaction, then they can just be used for what they are meant for and not for a store of assets. Anyone holding stablecoins is sitting on a time bomb unless they don't care and just want it to work the same way they hold their funds in a bank, although with more risk.  Left to me, I will be careful with even the transactions too

Ok, I'm not gonna lie, the topic alone was a kinda strange, cause I don't see how you store Bitcoin (digital asset) in stablecoins (another digital asset), it's either you're holding Bitcoin or stablecoin, but the context of the post made that clear. That aside, I honestly don't think there is anything wrong with USDT. Yes, there have been some news around it lately, about it's audit and transparency, but I'm pretty confident in USDT because of history. USDT is the first stable coin, it came up with a very unique idea that a lot of others forked, and we all know that when ur an OG, ur stronger and better than most. It is centralized because of how it is designed, if left decentralized, I don't think it will really be as stable anymore (although I stand to be corrected). DAI that is a decentralized stable coin have depegged a number of times, I think USDT amechanism made it that it should be centralized. Well let's see how it's audit will go, so that they can foster more trust by being transparent, although USDC is a bit more transparent than USDT though. But in all, since USDT have more liquidity and market Cap, I always do tend to choose USDT over USDC.