Hodling is still popular for many many people who do now want to sell even as markets dip down low, but most people may now be acting smarter by moving their cryptocurrencies to hold in the form of stablecoins.
Bitcoin and Ethereum have recorded huge dips in the last few days with the entire cryptocurrency market shedding off $30 billion of its total market value last week on November 14th. Bitcoin lost 13 percent, Bitcoin Cash 38 percent and Ethereum 5.5% in the last seven days. Bitcoin has traded for around $5,600, which is the lowest price in the year so far while the market cap for the entire cryptocurrencies has gone below $100 billion for the first time this year.
And by now, whatever could be causing the dip, nearly every prediction of a possible market recovery has turned out to be false by now. But there has been some positive activity in the stablecoin arena, with recently launched stablecoins including Circle’s (USDC), True USD (TUSD), and DAI having all seen more than a 200% increase in 24-hour trading volume.
The popularity of stablecoins is notable in the past week coinciding with Bitcoin's drop below $6000, what many thought was the bottom price. Stablecoins are a great way one could use to move money around the crypto ecosystem at a stable rate without losing value. The opportunity has actualized more because more crypto exchanges are now supporting trading of these stablecoins.
The volume for USDC shot by nearly 400% from slightly above $5 million on November 19th before Bitcoin dipped below $6,000 to over $25 million in a span of only 24 hours. The stablecoin is now in the list of 50 largest cryptocurrencies in terms of market cap at over $144 million.
A lot more money held in stablecoins may also be moving between different stablecoins with USDC, Dai, and TUSD, other stablecoins including the Gemini Dollar (GUSD) and the Paxos Standard Token (PAX) having been added recently. A quick look at the volumes for all stablecoins here reveals that the total trading volume is all-time-high for stablecoins. It short sharply in the month of November compared to all other times.
Tether, which has been the most popular stablecoin, had its 24-hour volume increase from around $2.6 billion last week to current over $5 Billion. TrueUSD has moved from a 24-hour volume of $17 million last week to current $69 million while Gemini Dollar has moved from $2.8 million to current $12 million in volume. Dai's 24-hour volume has moved up from $4 million to $19 million in a week's time.
The trend may be because fiat currencies are often hard to obtain through cryptocurrency exchanges and selling crypto for fiat in times of price drops in many cases takes days to complete. Stablecoins may also be a popular option for people who do not want to sell at the moment because they are expecting a surge in price in the near future. For instance, you may not want to sell your crypto and then need to buy it shortly after if the market happens to improve.
However, besides acting as a stable store of value, stablecoins could also unlock other potential for cryptocurrencies according to Coinjar Exchange Founder Asher Tan who said that they could pave the way for more people from the traditional financial world and legacy systems to try and gamble cryptocurrencies.
That said, stablecoins could also unlock more potential for applications of cryptocurrencies including their applications in e-commerce or shopping, etc.🔥51 Views