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The demand for stablecoins has reached record levels, prompting the world’s largest producer to keep on minting them.has hit an all-time high in terms of market capitalization and has been trading at a premium on some exchanges.
Crypto analytics tracker Skew has just reported that Tether’s market capitalization has reached $7 billion.
USDT just breached $7bln market cap and consistently trades at a premium to USD suggesting continuous demand pic.twitter.com/3JsHMD2kK2
— skew (@skewdotcom) April 18, 2020
Other analytics trackers, such as Coinmarketcap.com, are reporting a slightly lower figure of around $6.4 billion at the time or writing.
Since the beginning of the year, USDT market cap has increased by a whopping 56%, which dwarfs that ofonly gaining 2.3% in terms of market cap over the same period.
As a percentage of the entire crypto market, Tether now commands 3%, which is more than reported by BeInCrypto, Tether minted another $120 million late last week and has done so several times already this month.and combined. As
Stablecoin issuance surged to $8 billion during the first quarter of this year, more than all of 2019 combined. When USDT trades at over a dollar it signifies greater demand for the asset, which has been the case in recent months.
According to CryptoCompare’s monthly exchange review, Stablecoins are a class of cryptocurrency that aims to provide price stability. A perceived drawback of cryptocurrency is price volatility.... More volume surged in March; over 21 million in BTC representing 73% of the total BTC volume traded into fiat or stablecoins.
Demand for other stablecoins such as USDC and PAX has also increased, but Tether remains the king of the crypto castle.
Analysts and crypto industry observers have largely viewed the heightened demand for stablecoins as bullish, noting that it could signal readiness to buy up cryptocurrencies in a time when markets are depressed.
Another factor at play could be that investors and traders are moving into safer-haven currencies fearing a devaluation of theirs. More exposure to the dollar would be a good move in countries that are facing inflationary issues due to economic pressures.
China is one such country where Tether demand has increased recently, as traders seek liquidity and exposure to other digital assets through stablecoins. Fiat-to-crypto transactions are still banned in the People’s Republic, which makes Tether the vehicle of choice for getting into digital assets.
Many exchanges, such as Binance, are also offering good interest rates on stablecoins, something that will not be available from any high street bank anytime soon. This makes them more attractive than fiat; they maintain a peg, which reduces We can describe volatility as how much the value of an asset changes over a given time. A volatility index... More and exposure that riskier assets such as BTC have.
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