Diar and TradeBlock Both Conclude Stablecoins Use has Dwindled, USD Still Top Traded BTC Pair
It seems that stablecoins are losing traction after being able to increase their presence in the cryptocurrency market. According to a recent report published by TradeBlock, no stablecoin has found a clear use case besides trading.
The report reads as follows:
“While stablecoins initially saw traction as a digital currency trading pair on exchanges, this appears to have lost some momentum as trading volumes fall and as the US dollar maintains its dominance as the top trading pair in Bitcoin and altcoin transactions.”
After Diar, the USD Coin (USDC) has the largest number of holders, reaching 12k, and followed by TrueUSD (TUSD) with 10.6k. In terms of transfers, USDC is also in second place with 30.9k but followed by Paxos Standard (PAX) that handled 53.3k transfers. In the last position, we find Gemini USD (GUSD) that has 1.5k holders and managed 27.5k transactions.
Stablecoins have been growing during the last year due to controversies related to Tether (USDT), the largest stablecoin in the space. Currently, Tether is the 7th largest cryptocurrency with a market capitalization of $2.04 billion. The second largest stablecoin in terms of market capitalization is the USD Coin with a valuation of $240 million.
One of the main critics received by Tether is that it has never conducted an audit regarding the funds that it has stored. However, Deltec Bank & Trust Limited, a bank located in the Bahamas, informed that Thether had the necessary funds backing the USDT coins in the market.
In 2018, Tether lost its peg against the USD due to uncertainty among investors regarding the funds managed by the company. Additionally, in June 2018, John Griffin and Amin Shams wrote a paper in which they show why Tether was used to manipulate Bitcoin prices during price corrections.