eToro Quarterly Report: Q2 2020, Stablecoins Find a Mainstream Use Case

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In areas where unrest and inflation run rampant, individuals and businesses are increasingly turning to stablecoins to hedge against depreciation and send funds abroad quickly and cost-effectively. This is just one of the findings in new research released today by social investment platform eToro and The Tie, which examines the main themes and drivers within the crypto market.

Countries like Venezuela (where inflation exceeds 15,000%), and Iran (where inflation is over 34%) are seeing significant adoption of digital assets including Tether (USDT), which has more than doubled in overall value to around $10 billion since the start of the year, our research has found.

“While media coverage in Q2 continued to focus on bitcoin, the real story emerging from the data is centered around stablecoins,”  

“Fiat inflows into stablecoins exceeded $5B in only six months. We might be on the cusp of a systemic change, where developing countries that are searching for a way to ‘exit’ fiat-controlled government systems.”

Guy Hirsch, US Managing Director for Toro.

Additional key findings include:

  • Investor sentiment around bitcoin and gold became increasingly correlated as directional price movement remains disconnected. In June, the price of bitcoin and gold futures only moved in the same direction 50%of the time, while bitcoin and S&P 500 futures price moved in the same direction 62% of the time.
  • Many altcoins continue to outperform bitcoin intra-quarter. This past quarter, Cardano’s ADA and Ether saw the largest jumps in price, up 175%and 70%, respectively. This came as bitcoin performed in the middle of the pack in Q2, as the 8th best performing of the 15 assets available on eToro US.
  • DeFi (Decentralized Finance)  has become a major part of the cryptocurrency narrative, with more media mentions of DeFi in Q2 than bitcoin’s halving. However, media mentions of DeFi remain exclusively within crypto native publications, and despite the hype, the market is still extremely small, likely in the low thousands of users.
  • Tezos was the only crypto that saw an increase in the percentage of eToro users investing in it. All other crypto assets saw decreases as eToro users globally increasingly invested in stocks.

The report also includes interviews with some of the best performing investors on eToro, sharing their unique perspectives on where they see the best opportunities. Additionally, insights are also included from Arca’s vice president of research, Katie Talati; and Tron founder Justin Sun.

eToro launched its crypto trading platform in the US in March 2019. Since then, US registrations on eToro have increased over 221%.