Search Results
Working Paper
Flight to Safety: Evaluating Stablecoin’s Role as a Safe-Haven Asset in DeFi Markets
This study examines the impact of the stablecoin Tether (USDT) on systemic liquidity across the Ethereum and Bitcoin markets, utilizing an event study approach that integrates on-chain wallet data, pricing, and financial metrics. By analyzing cryptocurrency market responses to key protocol and market-moving events, augmented by nonlinear volatility models, we identify distinct, chain-specific flight-to-safety behaviors. Our results show that USDT acts as a primary liquidity lifeline for Ethereum holders during stress, particularly among retail investors, whereas its role for Bitcoin holders ...