- Stablecoins’s supply increases and reaches $8 billion by April, while cryptocurrencies faced significant fall.
- COVID-19 is one of the reasons that is serving in this cause.
- Stablecoins’ current market capitalization is equal to its whole 2019’s stats.
Another chaos arises in the global market of cryptocurrency due to the global coronavirus epidemic.
Cryptocurrencies are becoming weak in front of the stable coins, as due to the market conditions, traders are choosing stablecoins over cryptocurrency.
Cryptocurrencies are now facing heavy danger due to the increase in the trade of stablecoins. First, let’s understand what are stablecoins. Stablecoins are well-designed cryptocurrencies that adopted the manners to decrease the volatility in them. Stablecoins works on the mechanism of a pegged exchange regime. This method helps these currencies to have a stable pattern due to the policy of fixing up the prices. Due to these market conditions didn’t affect the prices of the cryptocurrency.
While other currencies are flexible currencies, that’s why they are prone to heavy volatility and negative momentum. While Stable coins are emerging strong currently due to the very fact that they are least prone to the volatility and they are harvesting best out of this opportunity to getting ahead of the cryptocurrencies.
The situation Is becoming Hectic!
Cryptocurrencies are getting cornered and suffering due to the up-surge of the stablecoins. As stablecoins works in a vice versa method against the cryptocurrency. So now downfall of prices due to many factors like Corona, global market conditions and trading deal that went sideways between Russia and Saudi Arabia are only adding points in the upsurge of the Stable coins.
This situation is so serious due to the following reason:-
- Bitcoins volume is decreasing as Ethereum pairs with it.
- Tether emerges winner in the market capital over the top-seeded cryptocurrencies.
- Cryptocurrencies’ momentum is looking weak in comparison with the stablecoin.
Ethereum is still seeking opportunities in this chaos and trying to cut out some gain through it. ETH is one of the leading platforms for the exchange of the stable coin. So now due to the increase in the demand for stable coins, ETH is planning to extend the scope of the operations in exchange.
But even among the stablecoins, Tether is being the top success story followed by the Coinbase, Binance, and Huobi.
As now traders are getting attracted towards the stablecoins plus table coins are full filling the current blanks of the crypto market.