- Tether volume rises by 30% in March
- Altcoins like USDC, TUSD, and PAX also posted gains
- Sell-off of risky cryptos behind the stablecoin rise
Cryptocurrency News Today – all the stablecoins in the digital asset market witnessed a 30% rise since the start of this month. The volume of Tether (USDT) alone has increased from $4.8 billion to $6.19 billion at the beginning of March 2020. Note that some of the data on CoinMarketCap and TradingView may have reported metrics on Tether wrongly as they have missed one network in which the USDT token is issued. That is what Bitcoin developer and CEO of Blockstream, Adam Back, says.
According to Back, Tether is issued on several networks, thus CoinMarketCap is missing data from one or more networks. The developer added that OMNI’s data has been excluded from CoinMarketCap and TradingView’s calculations.
The Rise in Stablecoins Isn’t Limited to Tether
The rise in stablecoins isn’t limited to Tether alone, but across all altcoins including USDC, TUSD, and PAX. According to Nick Carter, an on-chain cryptocurrency analyst and the co-founder of Coinmetrics, if you look closely the value of stablecoins are skyrocketing. He added that Tether is the biggest winner among them. USDC token has also added am impressive $140m within the space of one week. Eventually, it added $57 million again in the past week as well.
While a rise in the overall market cap of cryptos is good news for the digital currency industry, a rise in the value of stablecoins could be caused by, the decision of the Federal Reserve inducing up to $6 trillion liquidity in the market. The regulator claims the move was designed to prevent the country’s economy from digressing. It is also designed to aid citizens in the fight against the Wuhan virus.
Sell-off of Risky Cryptos Behind Stablecoin Rise
According to Tom Shaughnessy, a digital currency analyst who also co-founded Delphi research notes, the sell-off of risky crypto-assets behind the current rise in stablecoins. He thinks it is caused by traders and investors cashing out on riskier cryptos. He also mentioned that the demand for USD is also driving people to purchase USD backed stablecoins like Tether (USDT).
In the past, a rise in the volume of USDT has served as a precursor to a rise in the price of Bitcoin and the entire crypto-market. This is because more volume typically enters crypto-markets in such times. It might also imply that traders may be waiting on the side for a preferable (cheaper) entry into cryptocurrency markets, as the Coronavirus situation appears to be getting worse as each day passes. Time will reveal more regarding what outcomes we should expect.