The traditional market has become a kind of rock around the neck for Bitcoin. The stock market was overbought as many agreed, and the situation with the coronavirus has become a trigger for investors to reassess risks. If the dynamics of stocks is directly related to the quarantine in China and spreading the virus across the planet, Bitcoin knocked down with other assets as investors getting rid of all the risk indiscriminately. In this case, there is another confirmation of investors’ unwillingness to give BTC the properties of gold or other “safe-havens”.
As such, stablecoins may become an analogue of “digital gold”, as well as a convenient means of payment for retail around the world. Instead, this asset should scare the government, as merchants already use USDT as a convenient method of transferring money abroad. There were questions in the network around USDT emission backed by the real dollars, but actual users of this system hardly care about this. Sellers and buyers are more inclined to assess three things: speed, fees, and ease of use.
However, as long as the term “stablecoin” is slowly entering the mainstream, we are witnessing Bitcoin facing almost the same problems as traditional assets. After all, it is the only coin that is available for institutional investors.
There is another factor that may benefit the cryptocurrencies in general: regulator’s pressure on payment systems with their cards. ePayments was blocked recently, and similar processes occur with other payment systems. The tracking of the movement of funds has reached such a level that the only counterbalance to a traditional bank can only be cryptocurrencies.
At the moment, we can say that the crypto sector piggy-backs on the weaknesses of the banking system. Demand for an alternative, in addition to the low cost of transactions and speed, keeps the cryptocurrencies afloat and can put them on a pedestal after a new round of national financial problems.
The FxPro Analyst Team