Stablecoins like USDT, USDC, BUSD and PAXOS Become Traders’ Safe Haven as Bitcoin plungesJune 25, 2020
Stablecoins’ value is beginning to emerge and getting established in the mind of many new traders as BTC plunges and many analysts predict a bottom of $5000 to 6000$ before the next bull run to $10200 begins.
Stablecoins were created to solely compliment the volatility weakness in most cryptocurrencies as huge price fluctuations can cripple holders’ wallets in a matter of days. They are designed to mirror the value of the asset which backed them. Tether- USDT is the largest stablecoin by volume and it is backed by the United States Dollar. There are stablecoins like Paxos which is backed by Gold.
Eligible physical assets to be used to back any stablecoin must be one which has huge liquidity and doesn’t fluctuate haphazardly in price. Assets like Gold and Fiat currencies of certain countries fall into this category. Anyone creating a stablecoin must be transparent, there must be visible evidence that there are actual liquid assets backing the stablecoin else it will not gain adoption.
Cross Blockchain potential
Stablecoins have been seen to have the ability to connect blockchains as a particular stablecoin can be created on different blockchains so many people can have it on their favourite blockchain.
Traders see It as a Safe haven
As Bitcoin began to plunge a few hours ago, many analysts predict that it will fall to around $5000- $6000 before it retraces to break the $10,000 barrier to stabilize at around $10,200. This warranted many traders’ conversion of BTC to stable coins to stabilize the price so they can begin to buy it again when it bottoms to make more profit when it goes back up.
An anonymous trader stated a few hours ago:
“BTC probably will go down one time more before the bull run… at the moment I’m out, waiting to buy more BTC… all my money is now in TUSD, USDT, USDC and PAXOS…”
Opportunity for Online Shop Owners
Online shop owners can accept Cryptocurrency stablecoins too to cut losses due to frequent price changes. Apart from this, blockchain-based stablecoins will present them with unprecedented security and faster transactions with low fees. The liquidity behind stablecoins will help them change to fiat as quickly as possible in the shortest possible times.
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