Posted by Bitcoin (BTC) is now sitting below $40,000 for the first time since September 2021. Despite the softening of prices, however, other markets are benefiting including stable coins. Stablecoin is a cryptocurrency that is designed to minimize volatility by pegging to a more stable asset. This means that it is taking advantage of blockchain technology and peer-to-peer value transfer while not being exposed to high volatility such as BTC, Ethereum (ETH), or other cryptocurrencies.
With the growing demand for stable coins, they have become much maligned by regulators, but investors appear to be rotating out of risk assets into stable coins at an expedited pace. By now, the total stable coin market cap is $170 billion with $81 billion in daily trading volume according to the report made by Coingecko.
Forbes reported that some stable coins show higher capital inflows such as TerraUSD (UST), the native stable coin of the Terra blockchain, with which the market cap has grown from $2.7 billion to $11 billion. The same growth has been observed over Magic Internet Money (MIM), the native stable coin of the Abracadabra Money ecosystem, with a market cap now at $4.6 billion from $1.9 billion. This is also on the note of MIM’s ability to unlock liquidity of yield-bearing assets and generate even more yield via its DegenBox strategy. The same performance is also seen with other stable coins.
Stable coins come with different implementations, liquidity, risks, and acceptance. However, this current performance of stable coins shows that the industry is growing and not affected by the current dip of some major cryptocurrencies, particularly BTC. Some analysts also believe that if the market environment continues to soften, investor rotation into yield-bearing stable coins is likely to continue.
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