SNEAK PEEK
- The total value of a few stablecoins has now flipped Ethereum for the first time, according to a tweet from CoinMarketCap.
- Throughout this deleveraging process, many investors turned to stablecoins for protection.
- Although Ether’s Market Cap fluctuates, properly collateralized stablecoins usually do not.
CoinMarketCap took to Twitter to announce that the combined value of a few stablecoins has now flipped Ethereum for the first time. It says that “during this de-leveraging process, many investors sought safety in stablecoins.”
From #CMC x @glassnode Report #1:
— CoinMarketCap (@CoinMarketCap) August 8, 2022
During this de-leveraging process, many investors sought safety in #stablecoins.
This is the first time in history, the aggregate value of these stablecoins has now flipped #Ethereum.
<1/4> pic.twitter.com/39EBwbLwBG
The market is becoming more competitive, and preferences seem to be structurally changing. CoinMarketCap said these changes in supply have caused a noticeable shift in the top 4 stablecoins’ supremacy.
Many investors sought safety throughout this deleveraging process in stablecoins, which have quickly emerged as the preferred quotation asset across both controlled exchanges and decentralized finance. While the Market Cap of Ether is erratic, properly collateralized stablecoins are typically not; as a result, its value will fall only when net redemptions back to fiat occur (or originating collateral).
Since this is the first occurrence of its kind in history, it serves as evidence of stablecoins’ increasing dominance and the severity of the flight to stability in 2022.
And this is not the first time that stablecoins have outperformed ETH and have shown a better performance. The interoperability of the Ethereum network allows a wide range of tokens to operate within its ecosystem, facilitating smooth transactions between various parties. But as Watkins points out, ERC-20 stablecoins are by far the most sought-after token on the Ethereum network, partly as a result of the rise of the USDT-backed stablecoin.
Sometime between April and May 2019, USDT successfully exchanged ETH for ETH, and USDT has maintained its supremacy ever since. Tether Ltd, the stablecoin’s developer, started moving tokens to Ethereum in April 2019.
