Which stablecoins are really stable in the recent market storm?

A strong market sell-off on Tuesday resulted in leading tokens like Bitcoin, ETH, ADA and SOL falling double digits, giving stablecoins an opportunity to prove their worth.

Fixed-price cryptocurrencies offer traders temporary protection from the notorious price volatility of the crypto market by maintaining the rate almost at $ 1 and providing traders with ample liquidity.

Blockchain analytics service CryptoQuant reported a surge in stablecoin transfers as market capitalization fell from $ 2.38 trillion to $ 2.103 trillion on Tuesday.

For example, USDT, the leading stablecoin by volume, processed $ 10.51 billion in transactions on Tuesday, compared with $ 4.02 billion on Monday.

Average of all transfers Stablecoins | Source: CryptoQuant

Similarly, the second largest stablecoin, USDC, reportedly hovered $ 5.728 billion on Tuesday, up from $ 3.27 billion in the previous session, up 74 percent.

At the same time, the net supply of stablecoins in circulation remains relatively unused at around 67 billion US dollars, which indicates that there is sufficient liquidity against demand even if the market declines sharply. As a result, many of the top stablecoins stayed pegged at $ 1 despite a slight slide.

S.More reliable centralized table coin

The top 10 stablecoins with minimal average deviations from the $ 1 exchange rate include 6 centralized projects, two hybrid projects and two algorithm projects.

Demand for USDC pushed its average valuation down to around $ 0.00196 from the closing price, followed by PAX trading above the closing price of $ 0.00203.

above Top 10 stablecoins, sorted by mean deviation from lock U.S. dollar | Source: Larry Engineer

The native stablecoins BUSD of the Binance Exchange and the DAI from MakerDAO also maintain stability through a flexible system of collateralized debt positions (CDPs), an automated loopback mechanism and several incentive structures.

Higher demand for USDT also pushes the average variance to $ 0.00244.

Meanwhile, TUSD from TrustToken, HUSD from Stable Universal and UST from Terra are at $ 0.00249 to $ 0.00385. FRAX and FEI broke off the closing price to gain $ 0.00404 and $ 0.00474, respectively.

The data snapshot was taken in the 24 hours after the market crash on September 7th.

S.Table coin autumn Is It Good For Bitcoin?

On the flip side, the potential risks of stablecoins have also caught the attention of high-ranking U.S. officials, including Treasury Secretary Janet Yellen and Boston Federal Reserve Chairman Eric Rosengren.

In July, during a meeting with leaders of the Federal Reserve, the Securities and Exchange Commission, Yellen stressed “the need to act quickly to ensure there is an adequate US regulatory framework.” , Commodity Futures Trading Commission, Office of the Comptroller of the Currency, and the United States Federal Deposit Insurance Corporation.

Meanwhile, Rosengren identified USDT as a potential financial stability challenge.

In July, a report released by Fitch Ratings also found that secured stablecoins could trigger short-term contagion in the credit market. Abstract:

“The sudden bulk purchase of USDT could affect the stability of the short-term credit markets, especially if other stablecoins with similar asset reserves are purchased on a large scale.”

But what does the stablecoin market crash mean for bitcoin and digital assets? Mike McGlone, chief commodities strategist at Bloomberg Intelligence, said Bitcoin will benefit.

“If this entire market collapses, there will only be one safe store of value left: Bitcoin.”

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Minh Anh

According to Cointelegraph

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