Investors Make For Stablecoin Hills As USDT Volume Touches All-Time High
May 13 2022 - 7:00PM
NEWSBTC
With the market in turmoil, crypto investors are beginning to turn
to stablecoins such as USDT and USDC to provide cover from losses.
These stablecoins which are pegged to the U.S. dollar have been the
obvious winners from the recent crash but it seems that investors
are taking it one step further this time around. USDT volume across
the Ethereum blockchain shows that investors are ramping up their
activities in these stablecoins. USDT Provides Much-Needed Cover
Through the crypto market downtrend, only a handful of
cryptocurrencies have managed to retain their values. They were all
stablecoins, and although some of them had lost their peg, the
majority had been able to retain and provide some much-needed cover
for investors. The sheer amount of volume of USDT being moved by
investors on a daily basis is a testament to the fact that
investors are converting to stablecoins to weather the bear market.
Related Reading | Market Downtrend Trigger Bitcoin Inflows
From Institutional Investors On May 12th, the volume of Tether USD
being transacted on the Ethereum network reached a new all-time
high. Data shows that more than $33 billion worth of USDT was moved
across the network. This is significantly higher than the $24.5
billion in USDT that was transacted on February 4th, 2021, the
previous all-time high. USDT-U.S. Dollar peg at $0.9990 | Source:
USDTUSD on TradingView.com However, the motives behind both
records had been the same; investors getting out of highly volatile
digital assets into an asset that offered a measure of stability.
These investors did not wish to cash out their digital assets to
fiat currencies just yet and assets like USDT or USDC provide the
perfect place to park funds while waiting out the bear market.
Ethereum Fees Skyrocket One thing that investors moving into
stablecoins such as USDT has brought with it is increased
transaction fees on the Ethereum network. With so much volume being
moved across hundreds of thousands of transactions, the network is
expectedly congested and as such would have to increase gas fees to
be able to process these transactions. Related Reading
| Ethereum Tumbles To 10-Month Lows As Sell-Offs Intensifies
This was the case on May 12th as the network had recorded a large
number of transactions. Gas fees on the network for a single USDT
transaction were shown to have risen as high as $20 during this
one-day period. As many as 182,000 Tether transactions had been
carried out in the 24-hour period. Despite this high demand for the
stablecoin though, the market cap has not reflected this. Instead
of increasing, it is down by 3.34% in the last 24 hours.
Nevertheless, it remains an investor favorite as it is the largest
stablecoin in the market. At the time of writing, one USDT is
selling for $0.9988, maintaining a close peg to the U.S. dollar.
Featured image from Wccftech, chart from TradingView.com
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