What to Expect From Stablecoins During the Final Months of 2020

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Stablecoins continue to play an increasing role of importance in the cryptocurrency industry. Numerous currencies have noted success in this segment. However, the inflow of stablecoins across exchanges appears to be slowing down in recent days. 

Stablecoins Inflow Shifts Gears

It is always intriguing to see how stablecoins affect the cryptocurrency industry as  a whole. Some have proven to be more successful than others, for obvious reasons. That being said, it would appear that there is a shift in overall inflow of these digital assets. Fewer transactions are hitting exchanges since early September 2020. 

That being said, there are still peaks to take note of. After all, when the Bitcoin price rises, the influx of stablecoins tends to increase as well. Those rates aren’t necessarily sustainable, all things considered. As can be seen in the chart below, those “outliers” in terms of peaks tend to disappear fairly quickly. 


BlocDesk Stablecoins inflow
Source: CryptoQuant

Fewer stablecoin balances on exchanges is not necessarily a bad thing either. Although it influences overall liquidity, one also has to acknowledge Bitcoin is primarily traded against fiat currencies.

The same goes for all top crypto assets on the market today. Other options such as Tether and USD Coin note a decent trading volume  as well, but it is much lower compared to Dollars.

Following the recent price rise of Bitcoin, it seems the supply of stablecoins is dropping off. This may indicate no new demand has materialized in the past few days. Looking at the market cap of the top pegged currencies, they are still going up ever so slowly. An interesting trend well worth keeping an eye on. 

A Closer Look at Trading Pairs

One thing that becomes apparent for stablecoins is which asset they trade against. For Tether, the main market is currently BTC/USDT, but there are also decent pairs involving ETH, LINK, BNB, and others. For some pairs, the main draw is exchanging between the actual stablecoin and real fiat currency

BlocDesk USDC Trading
Source: CoinGecko

As far as USDC is concerned, things are a bit different. Its top trading pairs pertain to ETH, USDT, and BC in that order. This is not too different from USDT, although it is evident this asset is primarily trading against other stablecoins. 

At first, it was assumed there would never be a stablecoin-to-stablecoin demand. In reality, things are clearly very different. What the future will hold for these pegged currencies, remains to be determined. Their demand remains high, even if liquidity appears to be decreasing ever so slightly.