The downfall of Stable Currencies Continues with USDT Rising

On March 29, according to a stable currency report released by CryptoCompare, as of March 20, 2023, the total market value of stable currencies fell 1.34% to $133 billion, the lowest since September 2021, and has fallen for the 12th consecutive month. In addition, USDT’s market value rose 8.06% year-on-year (MoM) in March to $76.6 billion, and its market share rose to 57.5%, a new high since June 2021.

USDT’s market share rose to 57.5%, hitting a new high since June 2021

As per the stable currency report released by CryptoCompare on March 29, 2023, the total market value of stable currencies fell 1.34% to $133 billion, the lowest since September 2021, and has been falling for the 12th consecutive month. While the overall market value is declining, USDT’s market value rose 8.06% year-on-year (MoM) in March and reached $76.6 billion. Furthermore, the market share of USDT also rose to 57.5%, marking a new high since June 2021.

What are Stable Currencies?

Stable currencies, as the name suggests, are digital currencies that are designed to maintain a stable value. Unlike other cryptocurrencies that can have a highly volatile value, stable currencies’ values are usually pegged to a fiat currency (like the US dollar) or a tangible asset (like gold). They offer a low-risk investment opportunity and are used primarily for trading or storing value.

The Declining Trend of Stable Currencies

The report from CryptoCompare highlights the continuously decreasing trend in the overall market value of stable currencies. The causes behind this fall could be attributed to various factors, including regulatory concerns, geopolitical instability, or market manipulation.
Stable currencies, as a concept, are relatively new and have yet to be extensively tested. Therefore, the lack of regulation and controls could lead to potential fraud, manipulation, or other malpractices that undermine investor trust. Moreover, with increasing geopolitical tensions worldwide, investors could perceive stable currencies as a riskier asset and turn towards other traditional assets like gold or bonds.

USDT’s Continued Rise

While the overall market value of stable currencies is declining, USDT’s market value is on the rise. USDT, or Tether, is a stable currency that is pegged to the US dollar. It is one of the most widely used stable currencies in the market and provides a liquid, low-cost method to transfer funds. According to the report, USDT’s market share has reached 57.5%, marking a new high since June 2021. The rise of USDT could be attributed to various factors, including increased adoption, improved transparency, or favorable market conditions.

Conclusion

In conclusion, the declining trend of stable currencies is worrisome for investors who rely on them for trading or storing value. However, the rise of USDT indicates that stable currencies are still a relevant asset class and have a promising future. It is crucial to be aware of the risks and benefits associated with investing in stable currencies and research thoroughly before making any investment decisions.

FAQs

Q: Why are stable currencies falling in value?
A: The reasons behind the falling value of stable currencies could be attributed to regulatory concerns, geopolitical instability, or market manipulation.
Q: What is USDT?
A: USDT, or Tether, is a stable currency that is pegged to the US dollar. It is one of the most widely used stable currencies in the market and provides a liquid, low-cost method to transfer funds.
Q: Is investing in stable currencies risky?
A: As with any investment, there are risks and benefits associated with investing in stable currencies. It is crucial to research thoroughly and assess the risks before making any investment decisions.