Unlike other cryptocurrencies like Bitcoin, stablecoins are a type of cryptocurrency whose value is tied to an asset, e.g. a fiat currency or a commodity like gold. This helps them tackle price fluctuations. Some of the most popular stablecoins, like USD Coin (USDC) and Tether (USDT), are linked to the value of the US dollar.

However, there are also algorithmic stablecoins which are not pegged in this way, and are instead backed by algorithm-controlled digital asset portfolios.