Stablecoins Reap the Benefits While BTC Is Having Its Hard Time: Coin Metrics
Coin Metrics is a blockchain analysis firm which recently finds that while bitcoin (BTC) is experiencing its daily drop stablecoins, on the other hand, are doing quite good & are reaping the benefits.
Coin Metrics is globally famous for conducting various aspects of cryptocurrency tokens. The firm releases its State of the Network Report on 23rd March which focuses on how the crypto-verse performed at the time of bitcoin crash two weeks ago.
As per the data from the Coin Metrics, stablecoins have gained market share, spreads like fire and widened its future markets. Due to this, there’s a surge in transfer fees as more and more people rush to deposit coins. Crypto holders may switch to stablecoins because of the downturn that the market has faced a few days ago or maybe it’s an attempt to preserve their coins, but this is a good sign for stablecoin.
BTC Crash Helps Many Stablecoins Receive Notable Gains
Per the earlier media report, stablecoins such as Circle’s USD Coin (USDC) reaches its all-time high record just two days after the BTC market sees the downfall. Stablecoins’ market caps generally see an increment in its price after a major downturn hits the market, but that didn’t happen in this case.
The report states:
Stablecoin transfer value hit an all-time high amidst the market turmoil. On March 13th, the aggregated transfer of all stablecoins that we track reached a new all-time high of $444.21M.
Other stablecoins also clutch their accelerators during this downfall. Ethereum-based Tether sees a large increase in its market cap and reaches $3.7 billion by 22nd March 2020.
The report also outlines:
The dual impact of Bitcoin’s USD value halving and massive issuance of stablecoins led to stablecoins’ market cap as a percentage of Bitcoin’s doubling in a matter of days.
Stablecoins in Volatile Markets
USDC was the winner during a hard time that the crypto market faces a few weeks ago in terms of market caps. USDC sees a significant 57% increase in its market cap over the last thirty days. MakerDAO currently uses this stablecoin as collateral after the price of DAI increased to $1.06%.
The report says the coronavirus outbreak has affected the global market severely, but this is what also increases the supply of stablecoins. If the 12th March crash gives any indication about how the pandemic is affecting the entire crypto market, then investors may be looking at stablecoins to offer stability.