Will Stablecoins Remain Stable in the 2024 bull market or will Surge?

It's quite observable that the stablecoin tether usdt is experiencing significant growth. Who can actually remember the time when usdt rose to #1800 naira in Nigeria. The growth was major and affected not only Nigerian's currency. The value of this usdt was far more better than its previous years.

The question if usdt will increase again or drop is what many people concerned about. Some ask if the bull run will make the stablecoins we have unstable. Some still ask why it's called stablecoin when it do move. These questions would be answered in the course of this content. Remember, the value of dollar 3 years back isn't the value now. Permit me to make emphasis on the current, _Naira.

Stablecoin is a type of crypto designed to have its value stable unlike other cryptos which are very much volatile. Stablecoins being stable doesn't mean that it doesn't move. It does move but the stability emphasized here doesn't mean static mature but relates to violent movement up and down which in crypto is termed volatility.

Pexel

Unlike bitcoin and other coins that has price that swings violently, stablecoins doesn't that is why It is used as a medium of exchange. Example of such coins are the (US Dollar and commodities like gold). Now let's look into the other question that has to do with stablecoins being affected by the bull market. Let's go back to history to see what we can learn from price movements.

2012 - 2013 Bull run year During this period, there was a major event in the market which led to a surge in bitcoin from $13 which it was at that time at the beginning of the year to over $1,100 by December. This increase was as a result of market dynamics and other factors.

During this time, stablecoins weren't that popular compared to now. The exchange rate of dollars then was 156 naira approximately of which it had a slight increase to 160 naira. This slight increase was as a result if the Nigerian's economy and some global trends in the demand and supply factors.

• 2017-2018 bull run year: During this year's, bitcoin increased from the price it was at $1K in January to be precise and then hit $20k during the end of December, 2017. This surge was as a result of some major factors that influenced the market. Investors used usdt to enter and exit positions quickly which made the market capitalization of usdt to rise from $10 million to $1 billion at the end of the bull run season. This affected the price of dollars to naira. It rose from 305 naira to 365 naira according to my research.

• 2021 bull run: There was a surge in the price of crypto assets of which bitcoin moved from $8k to 69k all time high before it dropped. There was a boost in the market as some major financial institutions invested in crypto. The price of dollar surged too. It had a market capitalization of $5 billion which moved to $100 billion over that period. There was a heavy trade placement that year but the conversion to naira rose from 362 naira to 380 naira where the pandemic set in, causing a major depreciation in the value of naira to dollars.

What about now? It's surprising to witness dollars increased to 2000 naira before the problem arouse where exchanges like binance removed naira, NGN from its buy and sell options including conversion. This caused a drop from 2000 naira to 1200 naira. How about this now? Will it still rise again?

The history has shown the behaviour of dollars during the bull season.

Factors like investors running to stablecoin to be safe from crypto volatility in the market leads to an increase in demand, thereby leading to its market capitalization increasing sharply.
Let's assume during the bull run season, majority would be converting their assets to usdt to avoid the bear setting in to clear their positions in losses. People who sell off their bitcoins and other crypto coins would do so in dollars via usdt giving it more gains.

• Stablecoins are used as a medium of exchange and enhances quick and easy trading between cryptos. It is this stablecoin that are mostly used for trading by traders in the futures market. Trading volumes of this stablecoin experiences surges in the ecosystem. Other factors like, arbitrage opportunities also impact price action

History is repeating itself again which gives a trader an edge to make investment decisions that are profitable. Following these past market movements, I've been able to make substantial profits from the movement of the market.

If you can recall in my last post, I was made a saying that the price of bitcoin will surge to $66k and then drop to $63k by a 2% increase and this is exactly what is happening. Last bull run year which was 2021, bitcoin dropped from $42k to $39k with three red candlesticks and then pumped to $50k around July 18th-27th, 2021.

Application today is that the market is following that trend although not exactly. Bitcoin dropped from $66k to $63 and it has created two red candlesticks remaining just one before it surges to $79k. This is my prediction if it follows the past movement of the crypto market last bull run year.

This prediction may influence your decision to hold on to your assets as they'll be no major dump till August but always remember that the crypto market is very volatile and anything can lead to another. This is not a financial advise.

All screenshots are from my binance account and bybit wallet

Disclaimer: Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have