In recent weeks, the growing panic caused by the Corona virus has caused damage to markets around the world. While tens of billions of dollars have been drained from the cryptocurrency market, stablecoins are proving popular with investors who want to protect their assets while the market plummets.
The USDT stablecoin is at the forefront and other coins increase their capitalization as investors rush to find a way out of the fiat market chaos. USDC is one of the stablecoins currently in high demand.
Project CEO Jeremy Allaire said that although the negative developments in the cryptocurrency market were “not interesting”, he felt excited when “the demand for internet dollars increased”.
Allaire: The Corona virus pandemic proves that blockchain money is working
In the last few days of the market sell-off, very few coins have won. At its worst, Bitcoin alone lost over $ 60 billion in market capitalization in just a few hours. In terms of percentage losses, other cryptocurrencies are even worse.
However, less volatile monetary-based stablecoin projects like the US dollar have been more concerned by investors during the recent market crisis. The largest USDT stablecoin has a market cap of over 5 billion dollars.
Similarly, CircleC and Coinbase's USDC projects also increased market capitalization. In the tweet below, CEO Jeremy Allaire of Circle said that such increased demand is encouraging for the industry:
“The all-new, completely digital, blockchain-based monetary infrastructure is working.”
first/ #USDC surging in market demand over the past days, reaching new ATH at $ 568m in circulation. Fascinating to see “flight to safety” within the crypto macro market, but also demand for high quality USD liquidity for markets.
– Jeremy Allaire (@jerallaire) March 13, 2020
“1 / USDC has increased market demand in recent days, reaching new ATH with $ 568 million in circulation. It was interesting to see 'flight coming place “in the macro cryptocurrency market, but also requires high quality USD liquidity for the market.”
Will demand remain when things subside?
Thus, it is clear that the demand for stablecoins increases when the majority of investors are panicking. The question, however, is whether the dollar pegged cryptocurrencies are still attractive when things gradually stabilize? Allaire thought the answer was yes.
“The broader macro theme that will emerge after a pandemic is demand of the businesses depend entirely on decentralized infrastructure, minimizing trust. ”
It is cash that has been considered the cause of the virus spreading in some parts of the world. If viable alternatives and more functionality are available in the form of stablecoins, why is a company willing to take risks though small but not necessary to handle cash in the future? Allaire thought they would not do so.
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