As prices for digital coins and tokens continue to fall, a growing number of cryptocurrency investors are switching to stablecoins, a type of crypto whose value is pegged to the U.S. dollar or gold, according to research by Bank of America (BAC).
The bank’s token flow analysis shows that cryptocurrency buying is fading and that investors are rotating money into stablecoins.
Bank of America attributes the switch to mounting uncertainty related to traditional cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), and concerns of a prolonged bear market in stocks.
The Merge, the first of five planned upgrades to the Ethereum blockchain that will make it more energy efficient, is scheduled to take place on September 6 and could prove to be a catalyst for digital assets.
However, for now, investors are increasingly hedging their bets by moving money into stablecoins and away from cryptocurrencies.
The price of Bitcoin, the largest cryptocurrency by market capitalization, is down 58% this year and trading at just over $20,000 U.S.
Bank of America’s stock is down 27% on the year at $33.61 U.S. per share.
