However, the ICO recession triggered the development of a new crypto market segment — stablecoins. In essence, those are cryptocurrencies, the prices of which are stable relative to the entire market.
Stablecoins enter the scene
Retrospectively, when the market falls, investors are shifted to more stable assets. And it's not about the cryptocurrency market, the volume of which is not even comparable to the capitalization of major corporations like Google or Apple. It's about how the global capital market works.
During the 2008 crisis, US Treasury securities received record-breaking investments — that's what is traditionally regarded as the most risk-free investment option. The same is true for the cryptocurrency field. During periods when there were the sharpest drops in Bitcoin and Ethereum, there were jumps in purchases of stablecoins.
Much more compelling evidence of the growing popularity of stablecoins is the growth in the number of new startups in this area.
According to the Blockchain.com study, despite the fact that there are currently 23 stablecoin projects, 34 more projects are in development as well.
It is important to note that one such startup can release several stable cryptocurrencies at once, when one, for example, will be pegged to the dollar, and the other one to the euro. For this reason, the real number of stablecoins that will appear in the near future may be more than 50.
The growth in the number of new projects is associated not only with the growing market demand for stable cryptocurrency assets, but also with the disturbed reputation of the most popular stablecoin — Tether. In theory, the value of its USDT token should be equal to 1 US dollar, although in October, amid problems with foreign currency collateral, the USDT rate reached $ 0.92, which is 8% lower than the required price.