It seems that the emergence of Coronavirus, Covid-19, is increasing the demand for stablecoins
This reveals it Jeremy Allaire, co-founder and CEO of Circle, the company that issues USDC along with Coinbase, who wrote in a tweet:
“The USDC increased in market demand in recent days, reaching a new ATH at $ 568 million in circulation. It is fascinating to see the "flight to security" within the macro crypto market, but it also demands high quality USD liquidity for the markets. "
one/ #USDC surging in market demand over the past days, reaching new ATH at $ 568m in circulation. Fascinating to see «flight to safety» within the crypto macro market, but also demand for high quality USD liquidity for markets.
– Jeremy Allaire (@jerallaire) March 13, 2020
Allaire also adds that it's rewarding to see this completely new, fully digital, blockchain-based monetary infrastructureAlthough it is not exciting to see the collapse of the markets.
It also argues that the cryptocurrency demand could still rise significantly because individuals and businesses want a fast, global, secure and profitable digital architecture to send and receive payments with less counterparty risk and greater security.
Finally, Allaire notes that, after the pandemic, companies may need to rely on a decentralized and trustworthy infrastructure with programmable dollars (through smart contracts) and public channels.
Surely this difficult moment on a social and health level is not the best setting to celebrate professional goals, but what Allaire points out cannot go unnoticed.
However, this increase in market demand does not affect all stable currencies pegged to the US dollar. It certainly is Tether (USDT), which is by far the stable currency with the largest market capitalization, so like the USDC there is an increase in demand these days.
How do the other stable currencies behave?
Talking about Paxos Standard (PAX), the third stable currency linked to the dollar by market capitalization, there is an increase in demand, but very similar to what had already happened in mid-February. In fact, market capitalization has fallen and only increased again in the past few days.
For USDT Y USDC, the last days have seen highest peaks by market capitalization.
TrueUSD (TUSD), the fourth largest, has also been declining since early March and has only grown in the last days, But it has not yet reached the highest levels recorded at the beginning of last year.
Binance USD (BUSD), on the other hand, share the period of great success with USDT and USDC, registering its historical maximum, while for DAI the problem is more complex.
The new DAI It has only been in existence for a few months and is gradually replacing the old UPS. After peaking at more than $ 100 million in capitalization in November 2019, SAI has now fallen below $ 20 million, while DAI first rose to nearly $ 130 million in mid-February, before drop below $ 100 million in recent weeks.
DAI is probably affected by the difficulties that DeFi platforms are experiencing in recent weeks, first with the bZx / Fulcrum hack, then with the resulting problems of the blockade and the Ethereum network congestion.
For example, the DAI value locked on DeFi instruments is has collapsed lately. After peaking at more than $ 85 million on March 8, it is now less than half.
However, its value has not only resisted the impact very well, but, paradoxically, it has also increased, since on March 14 it even increased to $ 1.11. In fact, From March 12 onwards, the value of DAI has practically always been above $ 1, which is not at all common to other stable currencies pegged to the US currency.
