Stablecoins offer safe haven during Feb’s crypto | Australian Markets

With the cryptocurrency market experiencing its worst flip in years, stablecoins have emerged from the fray as an engaging defensive asset for digital currency buyers, the latest trading information from main international crypto exchange Binance has revealed.

The worldwide crypto market has taken a battering in latest months, with market cap falling by over 20% in February. The ever-popular Bitcoin recorded its greatest month-to-month loss since June 2022, shedding one-fifth of its worth, hitting a three-month low of US$78,273; Ethereum, the world’s second hottest crypto after Bitcoin (BTC), has misplaced almost 40% of its worth because the starting of February.

Stablecoins, against this, have bucked the broader crypto market, growing by round 10% because the begin of the yr. The full market cap for stablecoins – which, not like different cryptocurrencies, are pegged to both one other currency, commodity or financial instrument – surged to a new all-time high, exceeding US$224 billion.

“This growth is driven by market turbulence prompting a shift to stablecoins for reduced volatility, increased regulatory clarity from new US stablecoin bills enhancing market credibility, and attractive yields from real-world assets (RWAs), particularly in private credit, which continues to draw investor interest,” Binance wrote in its month-to-month market replace.

Over this identical period, the general crypto market declined by 13%, pushed down by escalating US trade tensions, a broader equity market sell-off, and the record-breaking US$1.5 billion hack of the UAE-based crypto exchange Bybit. Ethereum was significantly badly affected by news of the breach, which made headlines in mid-February, shedding 20% of its worth within the month.

Among the many worst performing of the highest 10 cryptocurrencies by market cap had been Solana, which misplaced almost 40% of its worth over February, Dogecoin (down 33.7%), Chainlink (down 33.6%), Cardano (down 23.8%) and Ethereum (down 20.0%).

Binance attributed the early 2025 crypto crash to broader financial ructions – turbulence which has additionally rattled the broader equity market – largely triggered by the Trump administration’s implementation of import tariffs on its closest trading companions (Canada and Mexico), in addition to an extra tariffs on China, finally “[dampening] investor confidence in late February and into March”.

“This policy uncertainty triggered sharp fluctuations across risk assets, putting downward pressure on Bitcoin and other cryptocurrencies,” Binance wrote. The crypto trader added that, over the previous month, the worldwide crypto market worth declined by more than a quarter, from US$3.6 trillion to US$2.8 trillion, “as traders moved to de-risk amid fears of an escalating trade war”.

Trump’s mercurial method to coverage has “prompted a flight to safety”, Binance stated, “stalling the early-year momentum seen in digital assets”.

As effectively, the Trump administration’s delay in implementing its promised national BTC reserve plan has additional unsettled markets.

“Originally expected to be a major bullish catalyst, the lack of clarity around the initiative contributed to investor uncertainty, leading to a 16% drop in Bitcoin and nearly US$3 billion in liquidations between February 24-26, its sharpest decline since the FTX collapse in 2022.”

“The convergence of macroeconomic and security challenges in recent weeks has certainly tested the market’s resilience,” stated James Quinn-Kumar, Director of Neighborhood Engagement at Binance Australia.

“Sudden tariff moves and events like the Bybit incident prompted many to pull back on risk in the short term. However, it’s important to note that we aren’t seeing people give up on crypto altogether. Instead, they’re taking a more defensive stance until the storm passes.”

Aussie merchants return to tried and true as memecoin frenzy cools

Australia’s crypto market has largely mirrored international trends, in accordance with Binance, echoing related shifts in trading behaviour and asset desire.

Curiosity in altcoins and speculative tokens cooled from the peaks seen earlier within the yr, with native merchants flooding back to BTC in March.

Notably, trading exercise in Trump’s memecoin ($TRUMP) and XRP subsided after a surge in January, leading to each belongings dropping out of the highest slots by quantity of merchants.

In the meantime, Solana (SOL) continued to draw sturdy engagement, drawing more merchants than Ethereum and cementing its place among the many prime three traded cash in Australia.

“The pullback in hype-driven trading, like the memecoin frenzy, indicates a maturing perspective among Australians,” stated Quinn-Kumar.

“We’re seeing our community here choose stability and fundamentals over short-term fads when volatility picks up. The fact that stablecoins and Bitcoin usage are rising indicates a move back towards established cryptocurrencies and lower-volatility assets, while still maintaining involvement in the market through strategic asset rotation.”