Stablecoins are going to be the backbone of the cryptocurrency world in the coming days with the asset growing in large numbers and price. Now, stablecoins are leading the way to be the next big thing of the crypto market across all platform in 2020.
Stablecoins Market Cap Increasing Massively
Crypto exchange specialist and analyst, skew shed more light on the fantastic growth of stablecoins market capitalization in a tweet. Skew noted that the importance of stablecoins to the crypto market was becoming a success story, and it might make its way to be one of the most significant innovation in 2020.
In the tweet, it was noted that as at last month USDC market cap had passed $700 million while USDT price is growing to about $7 billion and seems to have decoupled from the price of bitcoin. He further noted that even though the expectations around libra has reduced, the coin remains a wild card and could witness a surge in the coming days.
It should be noted that over 40 stablecoins are showing an increase in demand for the asset-backed digital currency, which each tied to an asset with the US dollar being the most used asset. With stablecoins having a large market cap of $7.94 billion, USDT contributes a large chunk to the stable coins total with its valuation reported to be $6.37 billion. Binance back USD coin (USDC) comes in far behind at second place with a $711 million valuation. Paxos Standard (PAX) valued at $245 million, Binance USD (BUSD) valued at $190 million and True USD (TUSD) valued at $136 million making up the top 5 list respectively.
Market Cap Pushed By Stablecoins Demand
Stablecoins were introduced to address the problem of volatility in the crypto market. The idea further allowed traders the opportunity to trade without the fear of massive price swings of cryptocurrencies. However, as the use of asset-backed crypto is gaining widespread acceptance, users are now using it as a means to protect and amass wealth without the fear of losing too much in crypto investment.
With stablecoins serving as a means for traders to hold currency without jumping directly into the market, they are still advantages over cryptocurrencies such as bitcoin that can make huge price swings thereby affecting investment. They have an advantage over medium fiat assets because they can do most thing that fiat assets can’t do. For example, they are easy to deposit, convert and withdraw at any interval without the trouble of banks and financial regulations.
The increased advantage has raised the use of stablecoins over regular cryptocurrencies, thereby causing demand for more units in the market. With the Coronavirus causing volatility in the crypto market, the need for stablecoins is currently on the increase as traders want to protect their investments and wealth. With the surge, the demand, market capitalization of stablecoins are expected to be on the rise in the coming days.