Stablecoins Are in Demand More Than Ever – Breaks the $20 Billion Milestone

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As per the latest data report published by Coin Metrics this last Thursday, the total value of stablecoins has now successfully surpassed the highly-impressive $20 billion mark. This is made that more remarkable considering that stablecoins have already broken the $10 billion mark merely four months before this development.

This surging demand for the particular digital tokens reflects the rising investor interest to look for other viable ways to hedge their assets amidst the ongoing COVID-19 global pandemic. John Todaro, the institutional research director of the prominent crypto data firm, TradeBlock, believes that the main factor for this apparent surge is the pricing downfall of non-stablecoin digital assets, such as that of Bitcoin (BTC).

Todaro notes that several traders nowadays utilize stablecoins as their intermediary step before fully committing to the generally much riskier cryptocurrencies. After getting ahold of stablecoins using fiat money, they would then try and convert them to cryptos, such as BTC and ETH, through its respective exchanges.

Stablecoin’s current rapid increase in demand is further emphasized by the data aggregated by Glassnode this last September 21st. According to Glassnode, the current balance on exchanges for Tether, the most prominent stablecoin to date, is at its all-time high. This then resulted in higher liquidity in crypto transactions and trading.

Lastly, as with almost all developments in the crypto space today, stablecoin’s surge is also seen by many as an effect by the white-hot interest surrounding the DeFi sector. This is because DeFi payers generally use stablecoins as staking assets on its various protocols to eventually receive much higher rewards.

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