Like any crypto enthusiast, our team took a moment to celebrate the big $50K this week. Celebrations were then quickly followed by scrolling Twitter for the latest #cryptotwitter memes.
#LaserRayUntil100K
While scrolling through our meme-filled feeds, we couldn’t help but notice .....
The amount of U.S. stablecoin activity happening on the @whale_alert's Twitter!
Check this out:
This got us wondering ...
Why, during a “bull run” for a decentralized currency, are U.S.-backed stablecoins buzzing with activity?
Fortunately, this isn’t the first time a cryptocurrency expert scratched his (or her!) head over this question.
Let’s take a look at a research project, The Influence of Stablecoin Issuances on Cryptocurrency Markets, conducted by Lennart Ante and Blockchain Research Lab for some answers.
First, let's look at Investopedia for some working definitions:
Two Sides of Different Coins
Stablecoin
Decentralized Currency
Using the above definitions, one can clearly see, stablecoins and decentralized currencies are two completely different coins with two completely different surfaces.
This brings us back to our original question:
During a “bull run” for a decentralized currency, why are stablecoins trending?
In our next post, we unpack the stablecoin issuance study from the Blockchain Research Lab for some answers. Stay tuned!