Stablecoins are profiting due to the recent crypto market crash

Ever since the coronavirus outbreak started to
spread out of China and around the world, the global economy saw major damage.
It was not long before the crypto market followed, as well, even though it
resisted at first.

However, it was not the entirety of the crypto
market that has suffered when the price crash finally arrived. Stablecoins,
thanks to their ties to the fiat currency price, managed to remain stable. Not
only that, but recent reports show that they actually profited.

Stablecoins serving as safe haven
during coronavirus-caused crash

As many likely know, Bitcoin was largely expected to become a safe haven during times of crisis, when fiat currencies fail. However, the coin is still too young and too volatile to fulfill that purpose, so stablecoins stepped in. They became assets for accumulation, and the new Coin Metrics report shows that their influence has skyrocketed.

The report looked into the state of the
stablecoins, noting that their pegs to the USD remained stable. The situation
was the same even on March 12th, as Bitcoin crashed by more than 50%. There was
only one small shift before March 12th, but other than that, all stablecoins
apart from Dai remained stable.

Apart from the prices, it appears that the
stablecoins’ bid/ask spreads also became volatile. The most sought out coins
included USDT and USDC. Meanwhile, their balances in exchanges exceeded $1
billion.

As a result of accumulations, Tether (USDT) saw the surge of its market cap, which exceeded $6 billion. At the time of writing, USDT sits as the fourth-largest cryptocurrency, with a market cap of $6.21 billion.

The majority of the stablecoins
sitting in Binance’s exchange

This kind of behavior indicates that traders
wish to secure the value of their investment by buying coins whose price
remains largely the same. However, they also seem to be keeping their money on
exchanges, waiting for good investment opportunities.

The majority of the funds sit in Binance’s
wallets. But, others, such as KuCoin. Polonies, Bitfinex, and Bittrex, are also
not far behind.

Binance’s own BUSD also saw its market cap
surge, and even triple in March, going from $68 million to $181 million.