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Blockchain analysis company Coin Metrics has found that while Bitcoin (BTC) was experiencing its biggest daily drop in the last seven years, stablecoins reaped the benefits.
Coin Metrics, which conducts analysis of various aspects of cryptocurrency tokens, released their State of the Network report on March 23. The report focused on how the rest of the crypto market fared during the BTC crash two weeks ago.
According to Coin Metrics data, stablecoins gained market share, spreads on spot and futures markets widened, and transfer fees spiked as people rushed to deposit coins. Crypto holders may have been turning to stablecoins in an attempt to preserve their capital while the market experienced a major downturn.
Many stablecoins make notable gains after crash
As Cointelegraph has reported, stablecoins like Circle’s USD Coin (USDC) had their market caps reach new all-time highs two days after the downturn. Stablecoin market caps are generally expected to increase after a major crypto market downturn, but that did not happen in this case.
“Stablecoin transfer value hit an all-time high amidst the market turmoil. On March 13th, the aggregated transfer of all stablecoins that we track reached a new all-time high of $444.21M.”
Other stablecoins also came out on top. Tether issued on Ethereum (USDT-ETH) had a large increase in market cap, which has reached $3.7 billion as of March 22.
“The dual impact of Bitcoin’s USD value halving and massive issuance of stablecoins led to stablecoins’ market cap as a percentage of Bitcoin’s doubling in a matter of days.”
Looking at stablecoins in a volatile market
USDC was the winner of the crash in terms of market caps, with a 57% increase over the last thirty days. The stablecoin is currently being used as collateral on MakerDAO after the price of their own decentralized stablecoin Dai (DAI) increased to $1.06.
After the coronavirus outbreak started affecting global markets, the supply of stablecoins began growing. If the March 12 crash were any indication of how the pandemic is affecting the crypto market, then investors may be looking at stablecoins to provide stability.
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