Study: Stablecoin depegs show threshold effect, severe narrative shocks can trigger panic selling

The study's threshold framing reframes stablecoin risk from a linear liquidity problem to a narrative-driven tipping point, suggesting that market resilience is not uniform but breaks down suddenly once sentiment crosses a critical mass. This matters for anyone relying on stablecoins as a safe harbor, as the self-reinforcing loop described implies that early retail exits can accelerate arbitrageur withdrawal, deepening the depeg. The key takeaway is not the shock itself but the fragility of the equilibrium before it, making the monitoring of narrative severity—not just on-chain metrics—a central variable. Whether such narrative thresholds can be predicted or managed remains the open question for risk models.