Crypto is Still Risk Asset, Except Stablecoins

[ad_1]

Digital assets still function as risk assets, dropping in parallel to rising interest rates worldwide according to a recent report by Bank of America (BAC), CoinDesk reported. However, there are some attempted signs of recovery, which include increasing inflow of stablecoins.

Stablecoin inflow reaches $490m

Stablecoins are a subcategory of cryptocurrencies whose value is pegged to the US dollar, gold, or another hard asset. Their inflow reached $490 million last week, up 58% from the previous week according to the BAC report, which stated:

Four biggest stablecoins with consistent net inflows

The four biggest stablecoins by market cap Tether, Binance USD, USD Coin, and Dai have seen exchange net inflows for the third consecutive week, the report stated, pointing out that major Binance USD (BUSD) inflows and USD Coin (USDC) outflows were most likely the outcome of investors preventively rotating from the latter into the former.

This was in order to prevent disruptions after Binance decided to convert some stablecoins into Binance USD automatically.

The Bank of America anticipates that legislative clarity will support adoption of DeFi.

Switch to PoS didnt help

Ether enjoyed gradual growth from mid-July to mid-August, but is now reversing gains as it emerges the Ethereum Mainnets transition to proof-of-stake (PoS) does not fix high fees or scalability concerns.

Investors are becoming warier, adopting a wait-and-see approach to potential upgrades, CoinDesk wrote.

Its probably best to wait and see either way because this transition, called the Merge, is only the first of five planned upgrades of the Ethereum Mainnet. It involved adoption of a proof-of-stake consensus mechanism, which is environmentally friendly.

[ad_2]