Stablecoins, led by Tether (USDT), have already made a lasting impression on 2019 with volumes beating that of 2018 in a mere five and a half months. According to a report by Diar, May 21, 2019, Tether has seen nearly $1.3 trillion in trading volume in 2019 so far, leading the stablecoin pack by a considerable margin.
Stablecoins Take Center Stage
Volumes and usage for Stablecoins have grown immensely in 2019, but not the way most of the industry was expecting. Stablecoin usage skyrocketed as a natural hedge against Bitcoin’s volatility rather than actual consumption. Crypto was split into two main factions on this front: one that believes stablecoins are just for traders and the other that considers stablecoins are meant to pay bills and spend.
Last year, Tether volume was just over $1.2 trillion. This year, however, it has already trumped that volume by nearly $200 million. USD Coin (USDC) and TrustToken USD (TUSD) also grew by a significant margin, with the latter coming in second to Tether, locking in $3.8 billion in trading volumes for May. USDC is picking up the pace with a blitzkrieg of volume that is up 435 percent since that start of the year.
One theory behind TUSD’s dominance over USDC is branding. It has been available in the market for a much longer time and has stayed in traders’ good books with regular audits and transparency reports, as has USDC.
Coinbase, which is helping propel USDC, has already launched several countries in the last month, increasing the usage potential of USDC drastically. Outstanding stablecoins issued has surged past $4 billion in total, with Tether claiming a lion’s share (77 percent) of the total issuance.
Issues Plaguing Stablecoins
Since the launch of Tether, many in the community have staunchly protested the use of stablecoins and warned people none of the mechanisms are viable for the long term. Despite this, stablecoins picked up a lot of traction because the vast majority of crypto users saw the potential use case these assets held.
There’s no doubt volume is skyrocketing due to some form of market manipulation. This point is evident from the surge in trading volumes for Bitcoin and altcoins, but also the number of traders that are using stablecoins to ride out the volatility.
Slow and steady has always won the race, but Bitcoin is known for taking the lead by doing the opposite. With stablecoin volume surging and many new projects in the pipeline, 2019 is already well on its way to being one of the most robust years for crypto development.