There has been an increase in the number of stablecoins issued over the past month, mainly on the Ethereum network. That popularity may also be lifting ether on Thursday.

Ether (ETH) prices have climbed 8.4 percent over the last 24 hours, according to CoinDesk price data as of 20:10 UTC (4:10 PM EDT )on Thursday.

Total supply of the top five fiat-backed stablecoins has increased by over 25 percent, primarily led by U.S. dollar-pegged tether (USDT) on the Ethereum network, with over $1.5 billion in issuance since March 12.

USDT, USDC, PAX and BUSD are all issued on Ethereum, although USDT also uses other blockchains such as Tron and Omni. Source: CoinDesk Research

The March 12 date is significant because that “Black Thursday” was a volatile day for cryptocurrency markets. Massive selling and derivatives liquidations totaling over $700 million on BitMEX sent prices downward, with ether going below $100 for the first time since 2018.

But this month the cryptocurrency market has been witnessing lower levels of spot trading volume and a dip in volatility after a see-saw March. So why are there more stablecoin assets being issued in this low volume, low-volatility environment?

“I think offshore and non-U.S. participation in getting access to [the U.S. dollar] through stablecoins is the culprit,” said Neil Van Huis, director of sales and institutional trading at digital asset financial services firm Blockfills. Van Huis also referenced the rise of other stablecoins, which compete with tether available on USD exchanges, also fueling growth. USDC, for example, is a joint venture between U.S. crypto companies Circle and Coinbase.

USDC stablecoin issuance since 2018 when it was launched. Source: CoinDesk Research

“Stablecoins, outside of tether, have become much more accessible globally,” Van Huis added.

As the world’s largest stablecoin, tether is mostly traded on exchanges that don’t have USD available. “Possible reasons for demand for stablecoin issuance might include users wishing to buy other digital assets and using stablecoins as a low-friction on-ramp as we believe they always have. In any event, we are gratified by the recent market demand for USDT,” said Stuart Hoegner, general counsel at Bitfinex, which controls the tether stablecoin.

So, what’s with the price rise of ether? Daniel Kim, head of business development for exchange aggregator SFOX, says the promise of decentralized finance (DeFi) is tending towards increased investment in ether. DeFi’s promise requires stablecoins to proliferate on the Ethereum network, and issuance increases are a bullish sign. “With market uncertainty, investors are looking for a safe yield investment, which stablecoins are providing.” Kim said.

See also: Ethereum Now Matches Bitcoin on One Key Metric

Even so, not everyone can agree on the prospects of Ethereum as a network translating into long-term ether gains, despite today’s price appreciation. “There’s a marginal contribution, but nothing that is defensible from the perspective of making ether a proxy for profiting from increased stablecoin issuance,” said Vishal Shah, a crypto options trader and founder of derivatives exchange Alpha5.

However, in the short term, SFOX’s Kim also noted both the wire transfer issues Finastra had when crypto markets crashed in March and coronavirus uncertainty as signals for some to invest in DeFi networks like Ethereum’s ether.

“With the most recent issue with Finastra and with what’s going on with COVID-19, investors are less confident of our banking system in moving funds when needed,” Kim noted. Indeed, value transfer on the Ethereum network is now surpassing that of Bitcoin, the world’s oldest cryptocurrency network.

Today’s price action

Prices for bitcoin (BTC) gained 3.6 percent in 24 hour trading Thursday according to CoinDesk’s Bitcoin Price Index as of 20:10 UTC (4:10 PM EDT in New York).

Trading for bitcoin has jumped above the 10- and 50-day moving average on spot exchanges including Coinbase. It’s a purely bullish signal after bitcoin broke into the $7,000 level around 9:00 UTC (5 a.m. EDT), triggering $23 million in liquidations on BitMEX with 93 percent consisting of short positions.

For the past 10 hours since the jump into $7,000 territory, bitcoin has been trading sideways in a $6,900-$7,000 range.

Bitcoin trading on Coinbase since April 14. Source: TradingView

Other markets

Most digital assets are up on CoinDesk’s big board for the day. Big gainers include zcash (ZEC) in the green 7.9 percent, eos (EOS) up 7.9 percent and decred (DCR) gaining 5.4 percent 20:10 UTC (4:10 PM EDT).

Elsewhere, gold is climbing by less than 1 percent as of 20:10 UTC (4:10 p.m. EDT) after a few days of sideways trading in the $1,700 range.

Contracts-for-difference on gold since April 14. Source: TradingView

In Asia, the Tokyo-based Nikkei 225 index closed Thursday down 1.3 percent as the transportation and real estate sectors were hit with losses.

Europe’s FTSE 100 index ended trading in the red less than a percent as one analyst noted subdued trading in London on the day.