Demand for stable coins rises in the Corona times

The market capitalization of Stablecoins stiegim last month, to $ 1.5 billion, because the Coronavirus has hit the world economy and slows down.

The co-founder of Coin Metrics, Nic Carter, said the impact of the increase in stable coins on the crypto market. An increase in the demand for Stablecoins could push the demand for ETH Zurich. Since the traditional finanzm falling markets and crypto-technology to continue to a Standstill, could be some investors fleeing to liquidity Stablecoins. The market for stable coins rose last month to $ 1.5 billion, and is estimated according to Coin Metrics now at over 7 billion dollars.

In a Thread about the recent increase in the Stablecoins, the co-founder of Coin Metrics, Nic Carter said that this could be related to the concern about the Corona, because the United States is Fiat money printing and the markets ijiziert, the impact of a global economy, to curb the slowdown. In view of the US stock market and the sell-out of the crypto market in the last weeks, the investors moved to less risky assets such as cash, may have escaped some investors to the USD-bound stablecoins, because these come in a liquidity crisis the cash on the next. According to Carter, this is not the only possible reason.

There is not the creation of stable coins, there are only cryptic risk investments that flow back into the stable coins. There is a demographic group that is used to convert digital Dollars in symbolic Fiat.

Carter also pointed to the growth of the stable coins on top of Ethereum, since its value that circulates on Ethereum, has approaches the value of Ether, the crypto-currency, which drives the Blockchain attached. On the question of the potential impact of the growth of stable coins on Ethereum Carter confirmed that this could mean that, if the user of the Blockchain and start using USD-denominated stable coins for the settlement of transactions and payment of fees, the demand for ethers is reduced,(freely translated):

what has a negative impact on the entire System, as this reduces the revenue of the Miner,

he said.

Why is the effect on Ether more pronounced than on Bitcoin?

The difference is that Bitcoin does not have a significant volume of stable coins. Tether used to be very much focused on Bitcoin, but it’s mainly migrated to the ETH.

The Central banks around the world pumping currently, capital is unrestrained in the market, in order to stimulate the ailing world economy and the looming crisis to further delay. Both the ECB and the FED will be ready in the next few weeks, each of 700 billion euros and 700 billion USD to buy short-term bonds, and shares in medium-sized companies. This creates a short upswing in the market, however, are not yet calculable long-term effects. The value of money continues to fall, food prices will increase and this will lead to resentment in the population. The macro-economic impact cannot currently be guessed at.