Bitcoin's (BTC) Wild Price Moves Send Stablecoin Demand Through the Roof

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Mon, 03/23/2020 - 14:59
Alex Dovbnya
Binance, one of the largest cryptocurrency exchanges, has nearly $1 bln worth of ERC-20 stablecoins in its coffers
Cover image via stock.adobe.com
Contents

Bitcoin’s wild volatility has drastically increased the demand for stablecoins that help traders weather the storm. According to data scientist Alex Svanevik, Binance’s total amount of ERC20-based stablecoins is about to reach $1 bln.

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A huge month for stablecoins

Stablecoins are typically pegged to the dollar or other fiat currencies. As the name suggests, they allow their holders to remain unscathed during extreme price moves that are associated with Bitcoin and altcoins. 

As reported by U.Today, fiat-pegged crypto assets ended up being the only hedge after the black Thursday when practically all coins took a 50 percent haircut. The circulating supply of Tether (USDT) swooned to $5.6 bln as a result of this. The lion’s share of these tokens (roughly 3.6 bln) is sitting on the Ethereum blockchain.     

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‘Aiming for unlimited’

When commenting on the new milestone, Binance CEO Changpeng Zhao said that ‘they were aiming for unlimited’ in an apparent reference to the highly contested open-ended quantitative easing policy implemented by the U.S. Federal Reserve. The most powerful central bank on the globe is going to go on an asset purchasing spree without any limits. 

In a stunning turnaround, BTC price popped more than nine percent on the announcement while the stock market managed to avert a brutal opening. However, this rally was short-lived.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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