Key Takeaways:
- On-chain metrics show an increase in the number of unique stablecoin addresses.
- The Turkiye inflation crisis pushed USDT demand in the region.
- Tether’s market cap broke $83.3 billion.
YEREVAN (CoinChapter.com) — Tether (USDT), the largest stablecoin by market cap, has become a sanctuary asset amid the US Securities and Exchange Commission (SEC) crackdown on the altcoin market.
More users turn to stablecoins; on-chain metrics say
According to the crypto analytical platform Crypto Quant, the total number of unique stablecoin addresses has risen since the lawsuits against Binance and Coinbase.
Stablecoins are intermediary assets, bridging the crypto market and the fiat economy.
Thus, they tend to thrive in times of economic and regulatory uncertainty. Investors seeking to preserve their ability to participate in the market may convert their now-dangerous altcoins into stablecoins and prioritize asset stability.
This way, they maintain a position in the cryptocurrency market while minimizing exposure to potential regulatory hurdles, “ensuring they are well-positioned for future trading opportunities.”
The CryptoQuant report also underscored the investors’ risk-averse approach as one of the main driving forces behind Tether’s success.
In times of legal scrutiny, investors tend to adopt a risk-averse approach. By shifting their investments from altcoins to stablecoins, they aim to reduce their exposure to potential regulatory actions and safeguard their capital.
noted the research.
Tether is safe haven amid Turkiye’s inflation crisis
Tether stablecoin has also emerged as a safe haven for Turkie residents seeking to offset the damage from the growing Lira inflation. According to a Bloomberg report, the demand for USDT has been high in the region since early May, leading to the presidential elections.
After two voting rounds, Recep Tayyip Erdogan has emerged as the victorious candidate in the Turkish presidential elections. In the race to secure his grip over the country for another five years, the long-time incumbent leader did nothing to curb the growing inflation in the country.
In detail, the Lira has slid 11% against the dollar in the past week as the Central Bank has pulled back from intervention to prop it up after the vote. Since the previous election 2018, the lira has lost 80% of its value as Erdogan pursued “unorthodox economic policies,” including attempts to tame inflation as high as 80% with interest-rate cuts.
Lira inflation made it difficult to purchase dollars or gold
As a result, it has become increasingly difficult for Turkiye residents to purchase gold or dollars with Lira. Enter stablecoins. Ebru Güven, an Istanbul-based university lecturer and former banker, confirmed the heightened demand for Tether in the region.
Investing in stablecoins allows people to keep the value of their wealth. It’s one of the ways to hold on to some value when inflation is this high. This is the only motivation for people to buy stablecoins right now.
Commented the expert.
Also read: Polygon Responds To SEC And Robinhood, Promises New Announcements Soon.
Moreover, according to CoinMarketCap, Tether trading on BTCTurk, one of the largest Turkish crypto exchanges, stands at 20%, compared to 1% on Binance, signaling that demand for the stablecoin in Turkish markets is strong.
The heightened demand keeps propping the USDT market cap
USDT has experienced an explosive rally year-to-date. The stablecoin added $17 billion to its market capitalization, which reached a new record of $83.3 billion on June 12.
Moreover, the stablecoin issuer became a Bitcoin bull. Tether announced it would allocate 15% of its net realized operating profits monthly toward BTC. Tether also registered record profits in Q1 on the back of the tanking competition.
One of USDT’s main competitors – Circle’s USDC, suffered a de-pegging incident and slumped due to the Silicon Valley Bank collapse in March. Binance stablecoins BUSD and TUSD could further suffer from the lawsuit, leaving Tether in charge of the sector.
