Crypto Market Favors Stablecoins Amid Correction Period

Seasoned cryptocurrency traders saw it coming a few weeks ago. A few of them even sounded the alarm, but not everyone paid attention. What ended up happening was not as bad as some expected, but in the end we ended up with a massive sell off that eroded the markets by more than a trillion dollars.

As Bitcoin struggled to hold the line around the $30K trading level, stablecoins operated in relative stability; this can be explained by the fact that traders are increasingly using stablecoins to either cash in or out of the market. The tokens issued by decentralized finance projects also held up pretty well, and this has a lot to do with their fundamentals. There is no question that DeFi will go through a bubble stage in the future, but certainly not at this time.

Why did the market take such a tumble after doing so well during the coronavirus pandemic? Some argue that the flight to safety strategy is being abandoned by major players and institutional investors who have managed to remain anonymous, but whose significant holdings in Bitcoin and Ethereum kept the market afloat and growing. There was a lot of speculation on exchanges like Poloniex, Bitstamp, Poloniex X , Poloniex OTC-EUR and such, but everyone seemed to have gone quiet because a lot of this was going to be put in public for the good of all of us.

Those of us who have been following Bitcoin and cryptocurrencies news have seen the market rise as a whole, but we have also learned not to be discouraged. Many people got burned on MtGox and all of that a few years ago, but we cannot ignore how far this market has come since the Bitcoin price went through that terrible point. The market is now worth trillions, and it will grow at a rate much greater than what anyone could have ever dreamed in 2014. The only way things will continue to grow like this is if we see a significant crash along the lines of Bitcoin's last big surge. For the time being, let's keep paying attention to DeFi and stablecoins.