Last May 5th, PAX reached the milestone of 24,000 transactions in a day, exceeding USDC. The market capitalization of stablecoins has almost doubled since the general crash on March 12h.
The cryptocurrency ecosystem analysis firm Coin Metrics recently noted that the stablecoin Paxos Standard (PAX) has nearly tripled its market capitalization, outperforming other fiat-pegged cryptocurrencies, amid the COVID-19 pandemic. Besides, the PAX token seems to be gaining ground in the global market, since there are indications that it is being used for some non-institutional purposes, such as remittances.
The market capitalization of stablecoins has grown to more than USD 10 billion, marking an accelerated increase since the “Black Thursday” crash, despite the drop of most non-stable assets. Even though the exact cause for this rise is still unknown, Coin Metrics conducted a study aimed at discovering the uses of anchored cryptocurrencies in the world. For that reason, it used heat maps to visualize daily usage patterns.
The report analyzes the usage patterns of various stablecoins and determines that they are being used for potentially different purposes, even favored in different parts of the world. For example, Tether (USDT), the most popular stablecoin today, has many more transactions during typical Asian and European business hours, compared to North American trading.
For the analysis, Coin Metrics specifically evaluated the USDT issued on the Ethereum network as an ERC-20 token. In this regard, the report states that USDT/ETH has a clear pattern of intensive use from about 2:00 to 16:00 UTC. That corresponds to the hours when the Asian and European stock markets are open. It adds that transfers darken towards the end of the day. For instance, there are very few transfers after 20:00, when the New York Stock Exchange (NYSE) closes.
In contrast, Paxos has been used more widely since last April, considering that transfers for this stablecoin have almost tripled since March 12th, when the World Health Organization (WHO) classified the coronavirus as a pandemic.
Last May 5th, PAX reached a new record of 24,000 transactions in one day, thus exceeding that of USDC and DAI. Data from Coin Metrics reveal that the use of PAX is more widespread throughout the day, suggesting that it may be gaining less institutional and more global use.
Coin Metrics analysts conclude that differences in regional use of the various stablecoins indicate that they are being used for different purposes worldwide and that USDT and USDC are still the most widely used in Asia, while PAX seems to have a broader level. However, it seems that North American trades are the main users of DAI.
A month ago, the number of stablecoins in circulation with 1:1 parity with the US dollar soared by 53% in less than two months, reaching new ceilings in 2020. At that time, the total capitalization of Tether, TrueUSD, USDCoin, Paxos Standard, Gemini dollar, Dai, BitUSD and sUSD, was USD 8,373 million, whilst the volume of joint transactions exceeded USD 60,563 million in 24 hours.
By Alexander Salazar