Stability After The Crash By Nate Maddrey and the Coin Metrics Team The crypto market has been tested over the last few weeks following a cascade of negative news. The resulting price crash has also been a big test for stablecoins, which are increasingly becoming a critical part of the ecosystem. On May 19th a flash crash caused by a liquidation cascade brought bitcoin’s price from $39K to close to $30K over the course of a few hours. Sudden unexpected price drops can throw stablecoins off of their price peg. As price drops, investors often rush to trade their cryptoassets into Tether (USDT), USDC, DAI, and other stablecoins. At the same time, liquidation events triggered by falling prices can cause stablecoins being used as collateral to be sold. This sudden shift in supply and demand can potentially knock stablecoin prices from their $1 peg, and threaten their stability.