Against the backdrop of a growing global economic crisis, falling financial markets, more stablecoins began to feel more confident. Also, the growth of volatility in the cryptocurrency market and the collapse of Bitcoin on March 12, 2020, played an important role. The demand for stablecoins has become a driver for increasing the volume of their minting. This situation necessitated a review of the regulatory system, which sets the standards for their functioning in digital life.
During the period of the fall of Bitcoin and the prevalence of bearish sentiment in the cryptocurrency market, many of the stablecoins began to build strength. In particular, in March, a tremendous increase in market capitalization Tether [USDT] was recorded.
The total amount of stablecoins minted since mid-March is estimated at $350 million, with 95% of them owned by Tether. Thanks to the support of fiat currency, Tether is less sensitive to price surges due to changes in demand among consumers. Tether’s market capitalization in March increase by 53% and now stands at about $7 billion.
What prospects do stable coins expect in 2020?
There is also an increase in demand for the exchange of Bitcoin for stablecoins. In particular, the trading of the BTC/USDT pair has increase 3 times and amounts to more than 21 million dollars. Now in the cryptocurrency market, there is a trend when the crypto is exchanged not for dollars, but stablecoins. This situation affected not only Bitcoin. In particular, in March, the volume of Ethereum exchange transactions for stablecoins increased.
Analysts also note an increase in demand for stable coins, which are supported by reserves of other cryptocurrencies. Unlike Tether, which is directly linked to finite funds, USDT or PAX provides a high level of decentralization.
The phenomenon of the current increase of interest in stablecoins commented on Wiess Ratings:
“Previously, stable coins were primarily used as a hedge asset, with which investors protected their investments during crises and fluctuations in the cryptocurrency market. Now the market paradigm can change dramatically. We have high hopes for Singapore, which should license the functioning of stable coins. An important step will be the introduction of a regulatory system. Decentralized stable coins can expect great prospects in 2020.”
Many analysts are convinced that stablecoins can be successful in the future since they combine the strengths of both cryptocurrencies and fiat funds.
This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.