Stablecoins Touched $20 Billion Mark: An Approximately 300% Year-to-Date Rise
The crypto world has hit another new record as the total worth of all stablecoins has touched the huge $20 billion mark on Thursday, 24 September 2020.
Data from Coin Metrics shows that the total worth of stablecoins has now exceeded $20 billion. This proves that there is a developing interest from investors to cushion or guard their investments or assets in both crypto and conventional markets during this COVID-19 pandemic.
Stablecoins Show An Approximately 300% Rise
In the crypto market, this interprets an almost 300% year-to-date rise for stablecoins. This news could be a game-changer considering that it came only after four months when the number touched a $10-billion mark in May 2020.
The rise of stablecoins may also be somewhat triggered by the current decline in the price of non-stablecoins such as Bitcoin and Ethereum. Also, one of the reasons could be the increase in user interest with decentralized finance (DeFi). Usually, stablecoins are utilized by DeFi yield farmers to accept crypto stocks from different DeFi platforms like Uniswap, Aave, and Curve.
The purpose of having a stablecoin has been established for a long time but for all purposes and ideas, its emergence began in early 2015 when cryptocurrency exchanges started listing USDT for trading against other tokens. Right now, Tether (USDT) is the most influential stablecoin by market capitalization. The USDT has also appeared with a story of its own, touching the $15 billion mark on CoinMarketCap.
It seems that more traders consider stablecoins as an optional measure before placing money in more volatile cryptocurrencies. After buying stablecoins with any fiat currencies, users can simply transfer them to exchanges and trade for cryptocurrencies such as Bitcoin, Ether, or other coins.
What Are Stablecoins?
Stablecoins are actually cryptocurrencies that are pegged to a one-to-one ratio against a relatively stable asset, such as the USD, or another cryptocurrency or commodity. Besides Tether, there are various USD-pegged stablecoins such as the Gemini dollar and USD Coin. As mentioned earlier, Tether is the biggest stablecoin by market cap.
All in all, Stablecoins are cryptocurrencies designed to overcome the impacts of price volatility. In order for this to happen, the value of a stablecoin needs to be fastened to currency, or to exchange-traded assets.