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Cryptocurrencies are falling as Putin’s war in Ukraine deepens the “cryptocurrency winter,” however, some cryptocurrency investors are moving their cash to a position that has value.
The stablecoins, which come with Tether, USD Coin and Binance USD, are connected to a fiat currency like the US dollar. As a result, their costs vary less and investors rush amid geopolitical turbulence.
This fluctuation became evident on Thursday as markets were shaken after russia’s invasion of Ukraine. The prices of Bitcoin and Ethereum, the most popular cryptocurrencies, fell by 7% and 9% respectively. Both have lost some of their value since reaching all-time highs. last November, according to CoinMarketCap.
On the other hand, Tether and USD Coin, the largest solid coins across market capitalization, have held at around $1 since last November. Stablecoins maintain their price by holding reserves of advertising paper or Treasury bills, according to Bloomberg.
Instead of taking their cash out of cryptocurrencies, investors put it into solid coins, James Malcolm, head of currency and cryptocurrencies at UBS, told Bloomberg.
“There is an aversion to threats, which creates a leak to relative security,” Malcolm said. “You temporarily park your cash by taking it out of the ecosystem, and all the prices and hassles that comes with it. “
Although Tether is the largest stablecoin, with a market capitalization of $79 billion, the largest stablecoin of the moment, USDC, is developing relative to its market capitalization of $53 billion.
If USDC continues to grow, it will overtake Tether as the most popular stablecoin in 2022, according to a report by Arcane Research, which tracks the cryptocurrency industry. The growing popularity of stablecoins has already led to a regulatory review of the category. scrutiny will likely continue at most in 2022 as his popularity increases, according to the Arcane Research report.
Cumulatively, the total price of all solid coins, or their market capitalization, is about $180 billion, up from $38 billion in the same period last year, according to Coin Metrics’ knowledge compiled through crypto news outlet The Block.
Although the most popular solid currencies maintained their dollar value on Thursday, Tether fell 0. 02% on Thursday morning and the USD coin rose 0. 06%.
This tale originally appeared in Fortune. com