In a paradoxical twist, bitcoin's price, which is denominated in dollars, has become unusually stable in recent weeks, prompting some Twitter users to joke that it's trading like a stablecoin.

"It’s surprising to see bitcoin be so boring given everything happening both within and outside the crypto industry," the digital-asset analysis firm Messari wrote in its daily email to subscribers. 

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On Wednesday, the cryptocurrency slid 0.5% to about $9,200, even as reports emerged that a bitcoin "giveaway" scam was at the heart of a coordinated hack targeting accounts of prominent Twitter users, including former U.S. President Barack Obama and Microsoft founder Bill Gates.

"Even if there is a small percentage of bitcoin that is used for illicit activity, investors now understand this is no different than cash, except that digital currencies are much more traceable," Joe DiPasquale, CEO of BitBull Capital, told First Mover in an email. 

Bitcoin was designed by Satoshi Nakamoto as a peer-to-peer payment method, a version of electronic cash that would "allow online payments to be sent directly from one party to another," according to the white paper. 

But a new report suggests bitcoin's original core payments function might be increasingly fulfilled by a competing faction of digital tokens – so-called stablecoins like tether and USD coin, which have values linked to the price of the U.S. dollar.

Stablecoins, invented five years ago, have expanded rapidly this year, doubling in the past four months to an outstanding supply of about $12 billion.

Cryptocurrency traders use them as the de facto form of liquidity in digital-asset markets, to move money between exchanges and park cash on the sidelines. Investors can lend out the dollar-linked tokens for yields up to 13%, more than 20 times the level on 10-year U.S. Treasury notes. Some holders might simply want U.S. dollars as a safe haven as the coronavirus roils the global economy. 

Recently, though, more people might be using stablecoins to send each other payments, according to a report this week published jointly by cryptocurrency exchange Bitstamp and research firm Coin Metrics. 

The analysts noted that the daily transfer value of stablecoins recently surged past $2 billion, while bitcoin's slid to just below $2 billion. Global remittances and cross-border payments are a "natural use case for stablecoins given their ease of international transfer," they wrote. 

"It feels like a little bit of a paradigm shift, especially now that stablecoins are exploding," Nate Maddrey, a senior research analyst at Coin Metrics, said in a phone interview. 

The sudden popularity of stablecoins could raise knotty questions over the utility of bitcoin, which is the oldest cryptocurrency, at 11 years, and the biggest by far, at a market capitalization of $170 billion. 

Maddrey believes bitcoin's value proposition has changed over the years: Many investors are buying it because they see the cryptocurrency as a store of value, similar to gold, and as the linchpin of the world's most secure blockchain network. Because of its capped supply, bitcoin is often posited as a hedge against inflation and central-bank money printing. 

"I don't really see a path where bitcoin becomes a true medium of exchange," Maddrey said. 

The rise of stablecoins marks a new chapter in fast-moving and ever-evolving cryptocurrency markets. A thousand flowers are blooming as entrepreneurs unveil semi-autonomous "decentralized finance" projects, financial firms prepare to tokenize traditional assets like U.S. Treasury bonds and foreign-exchange contracts, and Facebook pushes forward with its own digital token, Libra. PayPal, the payments company, has told the European Commission it's developing cryptocurrency capabilities. 

Countries around the world are developing their own tokens, known as central bank digital currencies, or CDBCs, which could eventually provide another option for peer-to-peer payments. Just this week, reports have emerged that both Japan and the U.K.are considering digital versions of their currencies. 

While the Federal Reserve has yet to unveil its own version, some countries with exchange rates pegged or closely linked to the dollar might be able to create CBDCs that work like proxies for the U.S. tender. 

That might curb the appetite for stablecoins, many of them issued by upstart companies with scant corporate transparency and untested creditworthiness.     

"Would you rather I sent you a stablecoin or a CBDC backed by a sovereign nation whose currency is pegged to the dollar?" Matt Blom, head of sales and trading for the digital-asset firm Diginex, said in a video interview. "I'd rather receive a sovereign-backed CBDC." 

Blockforce Capital, a cryptocurrency investment firm based in San Diego, wrote Wednesday in a monthly investor update that, at least for now, there's good money to be made from lending out or depositing stablecoins. 

"Stablecoins are proving their utility in the digital-asset ecosystem," according to the email. "Our traditional finance friends are often shocked to hear that as interest rates sink lower and even negative in some cases, we manage to earn close to 8% as we lend out stablecoins to high-quality counterparties."

On the other hand, holding stablecoins is essentially the reverse of betting on assets that are denominated in dollars, from stocks to bonds to oil and bitcoin. The Federal Reserve this year has pumped nearly $3 trillion of freshly created dollars into financial markets, propping up asset prices. 

"Holding dollars is no fun when assets are mooning," Mati Greenspan, founder of the analysis firm Quantum Economics, wrote in an email. 

But, hey, maybe some people might just want to send stablecoins to a pal.  

BTC: Price: $9,085 (BPI) | 24-Hr High: $9,253 | 24-Hr Low: $9,048

Trend: Bitcoin is edging lower on Thursday, with the four-hour chart indicating a failed breakout and fresh bearish lower-highs setup. 

The number one cryptocurrency by market value is currently trading near $9,080, representing a 1.3% decline on the day. 

A falling channel represented by trendlines connecting June 1 and 22 highs and June 2 and 15 lows was breached to the higher side on July 8. As such, the cryptocurrency was expected to chart a minor rally toward resistance at $9,800 (June 22 high). 

Instead, the cryptocurrency has ended up charting fresh bearish lower highs, as represented by the trendline connecting July 8 and 13 highs (yellow line). In addition, prices fell back inside the bearish channel early on Thursday – a sign of failed breakout. Chart analysts consider failed breakouts as strong bearish signals. 

Indicators, too, are beginning to realign in favor of the bears. The MACD histogram, an indicator used to identify trend strength and trend changes, is producing deeper bars below the zero line. It indicates the downward move may gather pace. Meanwhile, on the daily chart, the histogram has crossed into bearish territory below zero. 

Bitcoin may dive below $9,000 and test support at $8,830 (June 28 high). On the higher side, a high-volume move above $9,350 is needed to revive the case for a rally to $9,800.