Is the demand for Stablecoins decreasing?
During the COVID-19 crisis, the demand for stability is increasing all over the world. So why, in these times, is the demand for so-called Stablecoins actually decreasing?
Taking a look into the charts below (Courtesy of Cryptoslate.com), we can see that over the last 7 days, the demand for Stablecoins has dropped around 0.28%.
Looking into each coin more deeply, it is clear that none are thriving at the current time. Some are faring better than others, though. For example, over the course of 7 days, EURS (Statis Euro) has dropped by 0.42%, whilst PAX (Paxos Standard) has dropped by just 0.08% over the same time period.
Comparing these figures with Bitcoin and Altcoins, we can see an interesting trend:
As you can see, both Bitcoin (BTC) and the two biggest Altcoins Ethereum (ETH) and XRP have had relatively large upward trends over the last 7 days.
Ethereum is the biggest swinger, with a growth of 22.22%, followed by XRP at 12.5% and Bitcoin at 8.36% (All figures accurate as of time-of-publishing).
So why could this be? In uncertain times, people tend to look for stability in their lives, but as we have seen, the demand for Stablecoins is actually decreasing, and the demand for Bitcoin and Altcoins is growing.
Well, I believe that the most likely scenario we are encountering is one where people are looking for any additional streams of securing their finances. Look at it this way: If you have 5 bags of cash in your house, would you keep them all in one room? I think most people, myself included, would spread these bags out, to minimize the risk of damage through fire, or flooding or anything else.
The same goes for virtual finances - it is safer to hold your eggs in many baskets, and in this case, in many currencies.
Stablecoins have lots of real-world uses, but right now, it remains to be seen if they will continue in the same vein for much longer.