Crypto markets face turbulence amid altcoin decline and stablecoin surge
Crypto markets face turbulence amid altcoin decline and stablecoin surge
The market has been hit by a wave of turbulence, as major altcoins have experienced sharp declines, with some falling more than 10%, prompting increased demand for stablecoins.
According to a report from Cointelegraph, the prices of several prominent altcoins, including Ethereum, Solana, and Cardano, have plummeted by double digits, causing significant concern among investors.
In the past day, the cryptocurrency market capitalization has decreased by 3.5% to $2.46 trillion. As can be seen from CoinGecko figures, the two cryptocurrencies that have suffered the most among the top 20 by market cap on June 17 are Shiba Inu (SHIB) and Avalanche (AVAX), which fell 12.7% and 10.6% during the day. Solana (SOL) fell 9.4%, while Uniswap (UNI) and Dogecoin (DOGE) both had double-digit declines. The only non-stablecoin that was not in the red was Ripple's XRP, even if it only had a slight 0.1% uptick.
This downturn in altcoin prices is attributed to various factors, including regulatory uncertainties and market speculation. Also, this may be tied to a recent spot Bitcoin ETF outflows. Despite the lack of a clear catalyst for the sell-off, the impact has been widespread, with top altcoins bearing the brunt of the decline.
In contrast to the declining altcoin market, stablecoins have seen a surge in demand as a safe-haven instrument. Stablecoins, which are typically pegged to stable assets like the US dollar, offer a haven for investors seeking to mitigate risk during volatile periods.
According to a report by CryptoSlate, the circulating supply of stablecoins has peaked at $150.87 billion, reflecting a growing preference for stability among crypto investors. Tether (USDT), the most prominent stablecoin, has seen a significant increase in supply, underscoring its role as a key liquidity provider in the market.
The rising demand for stablecoins indicates a shift among investors who are preparing for continued market volatility. This trend suggests that while the cryptocurrency market offers substantial growth potential, it also requires careful risk management strategies.
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