The NuBits high price period starts when Bitcoin had its “Christmas crash.” By December 22 there was a strong news narrative about Bitcoin crashing.Īs long as there was a lot of uncertainty about Bitcoin’s stability, people kept buying large numbers of NuBits. What caused the increase? It’s clear when one looks at the Bitcoin price history. The price of the NuBits stablecoin was notably above its $1 peg between December 20 and December 28, when it peaked close to $1.50(!). People were buying millions of NuBits in late December. Was this spike just an accounting error, or had people suddenly decided NuBits was actually amazing? Their market cap had been stagnant for years, and suddenly it takes off. This is strange, considering the NuBits peg had been broken for such a long period in 2016.

That causes strong downward pressure on the stablecoin price.Īfter NuBits crashed in 2016, its market cap grew 1,500% on Coinmarketcap between the end of 2017 and the beginning of 2018, going from $950k to $14 million. It seems that when the Bitcoin and volatile cryptoassets’ prices spike, investors with capital in stablecoins will want to sell them off to get in on the spike. The price tanked and the peg stayed broken for an extended period. The NuBits peg was unable to handle the large sell-offs and broke. They wanted to get in on the spike, so they sold their NuBits in large quantities to buy Bitcoin. It’s plausible that the drop happened because of the following: People who had capital in NuBits saw how Bitcoin was spiking. This was about the same time that Bitcoin’s price suddenly spiked, after 6 months of relative stability. The initial price drop happened between May 26th and June 20th, 2016. In 2016, NuBits’ peg infamously broke, and it remained broken for 3 months.

Death Blade by Peg Case