The growth of stable parts in 2020 is unlike anything seen before. Every week more and more fiat-guaranteed crypto assets are printed, almost as quickly and as often as the Federal Reserve prints new cash.
After the final boost, total stable market capitalization reached a milestone of $ 10 billion. But what is driving the continued dramatic surge in demand?
Stablecoin's market capitalization reaches more than $ 10 billion
Throughout 2020, stable parts have taken an important step after step.
After a strong crash in May, the stablecoin known as Tether “freaked out” XRP for the third location in the total number of cryptocurrencies by market capitalization.
Only the amount of Tether circulating on the Ethereum blockchain alone has recently beaten Bitcoin in the daily transactions processed. Tether also exists on Bitcoin Omni- layer and the blockchain of Tron .
But it's not just Tether who is growing up. Joining Tether to see a major boom in new tokens being struck, are other rival USD Coin , Paxos Standard and other stablecoins .
In total, the stablecoins have reached a total market capitalization of $ 10 billion. This represents more than 3.5% of the total market capitalization of the cryptocurrency
Bitcoin currently holds a massive lead with more than 65% dominance, but Ethereum itself is not too far from the total stable market capitalization at just $ 25 billion, and only more than 9% of the total domination of the market.
But what exactly is fueling this incredible demand for more and more stable parts?
What is driving demand for the Fiat-backed crypto coin?
Tether has eliminated the negative stigma that once surrounded him to become a highly respected asset in the crypto space.
Stablecoins were mainly used as a safety drain when the notorious volatility of the cryptocurrency asset class hit.
As crypto prices plunge, traders cash their BTC and ETH in Tether and other stable coins, come out of the storm and use them to buy back at lower prices.
Because these assets are linked 1: 1 to the dollar, their value rarely varies very significantly.
However, these assets have clearly found additional use cases that have increased demand enough for new supplies to be made regularly.
Cryptographic assets no longer hang, so the request is due to other reasons. Crypto users have started using stablecoins to transfer from one wallet to another, due to the increased speed and lower costs associated with stablecoins on Bitcoin .
Their role in decentralized finance is also developing.
This sparked an entirely new era of cryptocurrencies that more closely mimic the digital versions of the dollar than Bitcoin .
The world's superpowers are all scrambling to create their own native version of a stablecoin. China is on the verge of deploying theirs, while the United States is just beginning to deploy it as part of its recovery efforts.
Even Facebook has attempted to launch its own Stablecoin Libra , called Libra .
With so much competition, but so much demand, and an extremely familiar exchange rate, stablecoins are fortunate enough to be the cryptocurrency killer app.
