Stablecoins Continue to Grow Amid Bitcoin Uncertainty and Crypto Market Death Spiral
2018 will go down in history as one of the most difficult periods of bearishness for the cryptocurrency markets. Though 2017 closed with a record high in the price of Bitcoin and ushered in a new era of expansion in the altcoin markets, 2018 has been marked with a steady decrease followed by an unprecedented freefall in the price of nearly every cryptocurrency in the expanding markets.
But one class of coins seems to be growing—not retreating—amid crypto’s most difficult season. Stablecoins are becoming even more popular, and their adoption is becoming much more mainstream among larger institutions than it had been just months before. A study published by the research organization Diar on December 10th revealed that stablecoin adoption is reaching an all-time-high, which is likely a very bullish sentiment for many within these bearish markets.
In particular, the study found that TUSD, PAX, GUSD, and USDC—four of the largest stablecoin projects currently on the market—have surged past the mark of USD $5 billion for transactions on the chain. Additionally, the report outlines that stablecoin market saw a surge of 1,032% in overall transactions in just three months following September.
Market Adoption Trends
More and more cryptocurrency exchanges have begun to add stablecoins into their existing platforms and infrastructures. In particular, the giant Bitfinex has now elected to add support for these four stablecoins to their platform, which had already included Tether (USDT), the largest and longest-running stablecoin in the industry.
Though this was part of a strategy on the part of Bitfinex to prevent subjectivity and encourage agnosticism in their own market, there can be no doubt that this move is a big one for the overall health and competitiveness of the cryptocurrency stablecoin markets. The market had already been critiqued by many within the crypto space for the lack of sustainable competition.
It is also important for analysts to note that the general crypto community sentiment towards Tether has fallen starkly in the past few months, as rumors of a lack of substantive planning and even sketchiness in the leadership surfaced earlier this year. This being said many within the community and industry are excited to see the proliferation and continued popularity of fair competitors for Tether in the growing and expanding stablecoin industry.
An Expanding Industry
The cryptocurrency markets have always been in need of a substantive stablecoin. A truly stablecoin would allow traders and exchanges to conduct business without the need for consumers to hold onto unstable and fluctuating cryptocurrencies in a volatile marketplace. But the road to the development of a truly stable coin has not been an easy one.
One cryptocurrency investor in China, Li Xiaolai, has announced his intention to conduct a new stablecoin project, working closely with the Grandshores Technology blockchain foundation to establish what he calls a “stable digital currency system.” As the stablecoin markets continue to thrive amidst a crypto winter, the development of more effective stablecoins will be an essential step on the road to a more sustainable crypto ecosystem.