Editor's Note: This article comes fromLongHash Blockchain Information (ID: Kyle Torpey), Author: Ada Wu, reproduced by Odaily with authorization.
Editor's Note: This article comes from
LongHash Blockchain Information (ID: Kyle Torpey) Since the birth of Bitcoin, the concept of decentralized cryptocurrency circulation and replacement of fiat currency has not been fully realized due to problems such as excessive value fluctuations and high transaction costs. Then, in response to market demand, combined with the characteristics of encrypted currency and the value preservation characteristics of legal currency, stable currency came into being. 2019 has been billed by the media as the first year of stablecoins. At the beginning of 2020, stablecoins performed strongly. Especially when the new crown virus swept through western developed countries and greatly impacted the international economy, stablecoins went the other way and showed explosive growth, becoming a rare "beneficiary" of the new crown virus. secondary title Take USDT, USDC, Pax USD, and BUSD as examples in the figure above for the issuance of stablecoins with the highest market capitalization. Since the beginning of March, especially in New York, California, and Illinois (the GDP of the three states is the largest in the United States as a whole) 10% of GDP) Since the announcement of a complete shutdown due to the epidemic in early and mid-March, the issuance of these five stablecoins has increased sharply. Among them, Tether and USDC, which are anchored to the value of the US dollar and have low transaction thresholds, stand out among digital currencies, and their market supply continues to grow. As of April 29, Tether has issued an additional USD 1.4 billion since March, and its market value has soared 34%. The explosive growth of the market value of stablecoins, in addition to the influence of the steady rise in the price of Bitcoin that is widely speculated in the market, combined with the timeline of the outbreak of stablecoins, the epidemic may also have played a part in it. secondary title Taking Tether as an example, except before and after the Federal Reserve announced the interest rate cut, it was basically trading at a premium from the outbreak of the epidemic in the United States in early March to the peak of the epidemic in mid-April, and the fluctuations in transaction prices and the fluctuations in the U.S. dollar index have a certain correlation trend. At the same time, comparing the U.S. dollar index and Tether transaction price curves in the above figure, it can be seen that the basic trend of the U.S. dollar index and the Tether transaction price have been significantly lowered and then rebounded around March 15, and the curves show a partial correlation. Although it is impossible to say whether stablecoins linked to the value of the U.S. dollar can directly benefit from the short supply of the U.S. dollar market under the new crown economic crisis, combined with the obvious demand for U.S. dollars by international capital (especially economies such as Japan and Brazil) in March growth, and the difficulties encountered by international capital in the current US dollar market, we can put forward the following speculations: USDT may be used by some investors in emerging markets who are trying to buy US dollars due to its low transaction threshold and high liquidity. An alternative investment; or because the international capital market is optimistic about the US dollar, it is more favored by investors than other cryptocurrencies. secondary title From the data on the balance of stablecoins in a group of exchanges on TokenAnalyst, it can be seen that since March 1, the balance of stablecoins on various exchanges has hit record highs repeatedly. LongHash, Use data to understand the blockchain., Author: Ada Wu, reproduced by Odaily with authorization.
The total issued supply of stablecoins rose sharply in March
It can be seen from the above figure that since the beginning of March, the US S&P500, Dow Jones Index and Nasdaq index have been diving repeatedly, while the trading price of USDT has been stable at around US$1 due to its value-preserving characteristics. In March, Tether was traded at an average premium of US$1.005 on the Kraken exchange; except on the 16th, which may be affected by the Federal Reserve’s announcement of interest rate cuts and closed below US$1, the rest of March closed at a price higher than US$1. Taking Kraken exchange data as an example on March 15th, the highest premium was 29.1%, which was a record high in the past six months.
