Stablecoins, which are cryptocurrencies that essentially have their value pegged to the U.S. dollar or other FIAT currencies, have increased in size over the past few months, as Bitcoin (BTC), as well as other cryptocurrencies, have seen a decrease.
The total market capitalization of stablecoins stands at $179.37 billion, which is up from $38 billion just a year prior, according to Coin Metrics Data which was compiled by The Block.
Crypto Traders Are Moving Their Holdings to Cash
This surge in market value showcases that cryptocurrency traders are moving their holdings to cash. Bitcoin prices have collapsed since November, and many smaller coins are posting even bigger declines as a result.
Companies such as Voyager Digital also announced plans to allow users to buy traditional stocks with USD Coin (USDC).
On the Flipside
- Instead of moving money off crypto-trading exchanges through converting them back into FIAT currencies, which could potentially be a more costly process, it’s easier for investors to simply wait out the volatility through the utilization of stablecoins instead.
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