Editor's Note: This article comes fromBabbitt Information (ID: bitcoin8btc)Editor's Note: This article comes from

Babbitt Information (ID: bitcoin8btc)

Babbitt Information (ID: bitcoin8btc)

, Author: Frank Cardona, Compiler: Overnight Porridge, published with permission.

During the time when the traditional market and the cryptocurrency market were hit hard, some investors may have turned to stablecoins. According to data provided by Coin Metrics, the market value of the stablecoin market has soared by US$1.5 billion in the last month and has now exceeded $7 billion.

Regarding the rise of stablecoins, Coin Metrics co-founder Nic Carter said that this may be related to investors' concerns about "brrr brrr" (Fed Flood).

"It may be related to brrr, the growth of USDC seems to be related to their launch of Circle platform services, and the growth of demand for USDT is related to the risk aversion of cryptocurrency traders? Especially for long-tail altcoin trading?"

As the U.S. stock market and crypto markets have experienced a sell-off in recent weeks, investors have turned to less risky assets such as cash, and perhaps some investors will flee to the dollar-pegged stablecoin assets, because during the liquidity crunch , which are closest to cash. However, according to Carter, that's not the only possible reason, saying on Twitter:"

"The wave of stablecoin minting is happening, not only because of the return of encrypted risk assets to stablecoins, but also because some people have converted digital dollars into tokenized fiat currencies."

Carter further noted:

"One of the most important charts in the cryptocurrency space, the market cap of stablecoin tokens on Ethereum versus the market cap of Ether. The market cap of stablecoins circulating on Ethereum is gradually catching up with the market cap of Ether.

When asked about the possible impact of the growth of stablecoins on Ethereum, Carter pointed out that it could mean that if users on the blockchain start using dollar-denominated stablecoins to settle transactions and pay fees, there will be less interest in Ethereum. Coin demand, he said:

"This negatively impacts the entire system, reducing miners' income."

And regarding the impact of stablecoins on Bitcoin, Carter added:

"Stablecoins have become less and less dependent on Bitcoin. Before, a large part of Tether's stablecoins were issued on the Bitcoin blockchain, but now most of them have migrated to the Ethereum network."