Stable coins have recently sparked some interest. Those linked to the US dollar have shown growth in market value. To learn more about this topic, Cointelegraph spoke in Spanish to Eduardo Morrison Gómez, Head of Sales and Business Development at IntoTheBlock.
“So far this year has been a very chaotic time for the financial markets, fueled by fear, volatility and negative sentiment around the world. Fortunately Since the beginning of April we have seen positive news for the markets in general. Investors appear to be more confident as we can see relevant gains across all major cryptocurrencies, ”said Morrison.
In order to better understand the stable coins and which metrics are driving their development, he said: “A stable coin is a class of cryptocurrencies that tries to offer price stability by being backed by reserve assets (previously mainly US dollars).”
In this scenario, he said that Tether is a relevant stable coin that was introduced in 2014 and was previously known as RealCoin. “However, stall coins with exciting promises did not appear until 2018 to improve financial access to non-bankers through cross-border payments and transfers,” he said.
So far, however, they have been used primarily as a method of reducing the risk associated with trading cryptocurrencies by allowing them to easily stay or move around in the digital ecosystem.
Morrison cited The Economist Intelligence Unit because according to the data available there, stable coins are becoming increasingly popular worldwide, which is largely due to the increasing use for transactions in international companies and not only due to the fact that cryptocurrencies are being moved quickly between exchanges.
“In the past month, the market value of the six most important stable coins associated with the US dollar has increased by more than 25% to approximately $ 8 billion. In some cases, stablecoins are even trading higher than the proposed $ 1 value, which can be seen as an indication of dollar accumulation in digital format, “he said.
“”The global crisis caused by COVID-19 offers stablecoins the opportunity to meet new use cases“For example, when governments try to provide large sections of the population who need it quickly with economic stimulus,” he added.
In addition, discussions are taking place around the world about central bank digital currencies known as CBDC projects. This process involves a large number of complex economic, technical and political decisions. “In this sense, China is known to be at the forefront with its digital yuan. England, France, Lithuania, the European Central Bank and Canada are also investigating such projects, “he said.
He also believed that Facebook’s Libra project, a digital token that can be used to make payments between millions of global social network users, also had a strong impact on the interest of stablecoins: “The token was originally for Approval designed For a basket of government currencies, however, the consortium behind Libra announced a few weeks ago that it would now issue stable coins that directly represent individual currencies such as the US dollar. “
On the other hand said that Tether (USDT) is currently the most important stable coin on the market And he said, “It is important to note that it has a $ 6.36 billion market cap with a large volume of daily transactions that classify it as number four of the most relevant crypto assets. The idea now is to drill down into performance analysis using a data-driven approach provided by the IntoTheBlock platform that combines hundreds of factors to extract unique information about each digital asset. “
According to Morrison, IntoTheBlock defines “large transactions” as transactions over $ 100,000. He clarified that this indicator shows how investors use stable coins during a bear market to protect their assets from price fluctuations. “Large transactions hit a seven-day high of $ 1.17 billion on April 22,” he said.
The level of network activity can be measured by the number of addresses that are active every day. Morrison also said that this number has risen steadily to 90,000 active addresses per day in the past month.
He also found that the metrics found in IntoTheBlock’s “east-west” analysis show that Tether is a heavily traded asset worldwide, but with a higher prevalence from Asia (56.71% of transactions), where the Acceptance seems to be faster. .
Finally: I found it interesting to see how Tether is used as a store of value when you consider that the demand for USD is increasing worldwide. The “Ownership by Time Held” analysis segments the addresses based on their holding times. “Below we can see how the Hodlers indicator covers the number of long-term owners (those who are older than one year) who have been growing steadily every month over the past year. It can be said with certainty that there is a long-term trend for Hodling USDT as the average hold time of Tether remains at 1.1 years, “he said.
Morrison said that Only time will tell us whether stablecoins will outperform the bank dollar due to lower costs, immediate transfers around the clock and the reduced regulatory environment. “As stablecoins continue to evolve in the market, some of these indicators show different perspectives and perspectives to better understand and analyze these assets,” he concluded.
You may be interested in: