After scanning the whole financial markets, including traditional and digital, we come to know that Stablecoins are the only assets that show a bullish patter in terms of volume amid Coronavirus. It is not wrong to say that only stablecoins are beneficiaries of COVID-19.
There are some reasons why pegged-cryptocurrencies are shining in this uncertainty caused by the Coronavirus pandemic. Bitcoin and other leading cryptocurrencies are known for their high volatile nature. The pegged cryptocurrencies have created an efficient bridge between the fiat currencies and digital currencies. The crypto investors covert their crypto holdings rapidly into fiat-pegged cryptocurrencies whenever they sense a crash in the crypto markets. They go for stablecoins instead of fiat currencies to return to crypto markets after receiving a green signal.
Market Cap Surged by 37% in March and April
When California, New York, and Illinois closed down due to Coronavirus, the markets suddenly started going down, including crypto markets. But the supply of Tether, USDC, BUSD, and PAX USD increased exponentially since then. From March to April 29, Tether issued nearly $1.7 billion USDT, and in this time frame, the market cap of USDT soared by 37%. It is normally happens when there is uncertainty in the Bitcoin markets, but this time the credit goes to COVID-19.
In short supply of the US dollar, it is possible that people wanted to take US-pegged USDT as an alternative to hedge their investment. This is confirmed by the unnatural increase in the coin supply in the previous two months.
The data of Coin Matric reveals an interesting fact that people are now trading stablecoins more than Ethereum. Almost, all crypto exchanges witness a significant increase in the volume of pegged coins.
According to many analysts, the people who are investing in USDT are actually Bitcoin investors. They are just waiting to get a bullish signal to enter into Bitcoin markets.
Tether is now Close to Becoming Third Largest Cryptocurrency
According to CoinMarketCap, the market cap of Tether is now close to XRP, the third-largest cryptocurrency by market volume. After gaining a few million, USDT will become the third-largest cryptocurrency by volume.