USDT Provides Much-Needed Cover
Through the crypto market downtrend, only a handful of cryptocurrencies have managed to retain their values. They were all stablecoins, and although some of them had lost their peg, the majority had been able to retain and provide some much-needed cover for investors. The sheer amount of volume of USDT being moved by investors on a daily basis is a testament to the fact that investors are converting to stablecoins to weather the bear market.Related Reading | Market Downtrend Trigger Bitcoin Inflows From Institutional Investors
USDT-U.S. Dollar peg at $0.9990 | Source:However, the motives behind both records had been the same; investors getting out of highly volatile digital assets into an asset that offered a measure of stability. These investors did not wish to cash out their digital assets to fiat currencies just yet and assets like USDT or USDC provide the perfect place to park funds while waiting out the bear market.
Ethereum Fees Skyrocket
One thing that investors moving into stablecoins such as USDT has brought with it is increased transaction fees on the Ethereum network. With so much volume being moved across hundreds of thousands of transactions, the network is expectedly congested and as such would have to increase gas fees to be able to process these transactions.Related Reading | Ethereum Tumbles To 10-Month Lows As Sell-Offs Intensifies
This was the case on May 12th as the network had recorded a large number of transactions. Gas fees on the network for a single USDT transaction were shown to have during this one-day period. As many as 182,000 Tether transactions had been carried out in the 24-hour period.Featured image from Wccftech, chart from TradingView.com