Why TRON is green while everything is red

This story was written in the morning on Monday, April 29th, so all the numbers included in this article will be reflective of that date. 

It’s been a frustrating week for many traders as BTC has corrected down to just above 63k, but don’t let emotions cloud your judgment. If you have your multi-pair bots set up to monitor a lot of different pairs, then maybe you benefit this week when BONK (love the name) moved up over 22% in value. 

Here are a few notable ones from the top 10. Although there’s a lot of red in the market this week, it’s not a complete bloodbath. Very few coins saw more than a 15% downward price change, indicating there’s no sense of panic in the markets. 

BTC -5.4%

ETH -0.81%

SOL -12.69%

It gets grimmer from there, with every single coin in the top 20 is in the red except for Tron, and we bet a lot of you are curious as to why that is. While we cannot promise that our answer is definitive, we’re going to do our best to offer you a reasonable hypothesis backed up by some data. 

TRON is at +6.26% for the week. What’s going on here? Well, the primary theory is that it’s because TRON has real world use cases and adoption of it is accelerating very dynamically outside of the EU, U.S., and Chinese markets. It turns out that Tron quietly became the number one blockchain for stablecoin transfers. 

Why TRON became the network of choice for stablecoin users

Inflation and accompanying currency devaluation are major issues in most countries these days. The more unstable your nation’s currency is, the less willing people are to maintain savings or other accounts using that currency. So in this modern world of convenient apps and fast electronic transfers, citizens in countries like Argentina, where inflation has been rampant and the peso is almost 100% less valuable than it was a year ago, people are taking salary payments in stablecoins like USDT. In order to purchase and transfer USDT, users went looking for an economical network to do it on. If you guessed that network turned out to be TRON, then you guessed correctly. 

Affordable, fast, and easy to use. 

Within the crypto community, opinions of TRON’s founder, Justin Sun, range from believing he’s a guru to people alleging that he stole ideas from other projects. For the record, 3Commas has no opinion on Justin Sun and we are simply doing our due diligence by informing readers that he is a figure who has attracted some controversy and elicits strong reactions from long-time crypto enthusiasts. 

But end-users don’t care about that controversy. They see a platform that works as advertised and is much cheaper to use than Ethereum and several other chains. This article from October of 2023 does a good job of discussing the details of consumer sentiment about stable coins. They interviewed shop owners and bank employees in Argentina to find out why they were using TRON so much. 

One of the key points was simply a lack of trust in their national currency. In the U.S., many consumers are facing a mighty struggle to cope with the rapid rise in cost of living expenses due to inflation, and that’s with inflation that’s lower than in most western nations. For people living in nations that don’t use the dollar or Euro, inflation combined with a weak currency can seriously cripple your buying power in a short period of time.

In Argentina, it’s becoming increasingly popular to conduct bigger transactions using USDT and moving it with TRON because it’s around 30% of the cost of moving USDT on the Ethereum chain. It should be noted that there are layer 2 solutions on the Ethereum chain that are even cheaper than TRON, but whether it’s an ease of use issue or a speed issue, TRON is beating them out and it’s not even close. BSC is the next highest volume network for moving USDT, and it has around 42% of the volume that TRON transfers. 

So there you have it. We think TRON is maintaining its value because it is seeing growing adoption in countries with less than reliable central bank fiat currencies. From a trading perspective, it’s a somewhat standard practice to exit an asset by trading it for stablecoins. If users are then using those stablecoins to pay bills or buy consumer goods, they’re likely using TRON to do it, thus increasing the demand for TRON and correspondingly assisting with its rise in value. 

Will stablecoins kill off less viable fiat currencies?

It’s possible, but there are a few reasons it will take some time. When making small purchases, you can pay cash or debit card with fiat with no fees. This makes buying a soda and a bag of chips from the corner store far more economical to do with dollars or pesos than USDT or BTC, for example.

There’s also still a lot of work to be done when it comes to security and trust with blockchain currencies. It might seem counterintuitive for people to trust an unstable fiat currency over a cryptocurrency like USDT that was designed from the ground up to be as stable as possible, but it’s simply reality that normal people are inherently skeptical of fintech solutions that rely on digital currencies. As TRON continues to be the platform of choice, and USDT continues to be a good currency solution for people in emerging markets to dodge currency devaluation and rampant inflation, we will likely see those attitudes shift over time. 

People usually vote with their wallets, and when the USDT and TRON combo offers them a way to do more with their paychecks, it’s bound to change some minds.

3Commas did not write this in partnership with the teams from TRON or USDT. We just wanted to take a look at potential reasons for TRON to be the only top 20 coin not in the red this week.