Stabilization: In a volatile market, allocating a portion of a portfolio to stablecoins can stabilize the overall value, reducing the impact of price swings in other assets.
Capital Preservation: Stablecoins help preserve capital during bear markets, allowing investors to avoid realizing losses until the market recovers.
Liquidity Management: Stablecoins provide liquidity for quick entry and exit from positions, especially in markets with high volatility and low liquidity for other assets.
Safe Haven: Similar to traditional safe-haven assets like gold, stablecoins can act as a safe haven during times of market stress, providing a stable store of value.