In recent weeks, panic caused by coronavirus has intensified and has swept the global market. The cryptocurrency market lost tens of billions of dollars in this slaughter, and stablecoins are proving to be popular with investors who want to protect their wealth when the market is down.
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As BeInCrypto recently reported, with the mass market turmoil and crypto investors eager to withdraw to fiat currencies, the mainstream stablecoin Tether and other stablecoins have gained market value. The USDC-backed USDC plan co-sponsored by Circle and Coinbase is one of the stablecoins with increasing demand.
Jeremy Allaire, the project's chief executive, said that while the cryptocurrency market's decline was "not so exciting", he encouraged people to see "the demand for internet dollars" increase.
Allaire: Coronavirus pandemic proves blockchain funding is working
There have been few winners in recent days of market selling. At its worst, Bitcoin has evaporated more than $ 60 billion from market value in just a few hours. In terms of percentage loss, other digital currencies performed even worse.
However, during the recent market turmoil, stablecoin projects linked to less volatile currencies such as the US dollar have renewed investor interest. The market value of the largest stablecoin USDT rose to over $ 5 billion.
Similarly, the USDC of Circle and Coinbase projects also experienced market value growth. Circle CEO Jeremy Allaire said on Twitter that this increase in demand is encouraging for the industry:
"… this new, completely digital, blockchain-based monetary infrastructure is working."
Will demand still exist after things calm down?
It is clear that with the panic of a large number of cryptocurrency investors, the demand for stablecoins should increase. But the question is, will the digital currency pegged to the US dollar still be attractive when things finally start to stabilize?
Allaire thinks they will. In the following post, he wrote:
"A broader macro theme that will emerge after the pandemic is that companies need to rely more fully on trust minimization and a decentralized infrastructure."
As BeInCrypto previously reported, with the spread of the corona virus, physical cash itself has been considered suspicious in some parts of the world. If a stablecoin becomes a viable and more powerful alternative, why would a company even open the door to small but unnecessary risks of handling cash in the future? Aller thinks they won't.