What happened to GUSD, whose market value of PAX has doubled and shrunk by 80%?
to reportto report, since the stablecoin Tether and its parent company Bitfinex have been involved in a fight with the New York Attorney General's Office, the situation of most other stablecoins has improved quite a bit.
But there is one exception. The market value of the stablecoin Gemini Dollars (GUSD), which was launched in September 2018 and launched by the exchange Gemini, has fallen below 22 million US dollars, which has shrunk by 80% compared to before. The market value of PAX, which was recognized by the New York Department of Financial Services, soared to a new all-time high, reaching nearly $200 million, almost doubling.
It's unclear why GUSD is in trouble. But sources in the trading community believe it may have something to do with the scheme the company is using to spur adoption. At the end of last year, Gemini offered a discount on GUSD to trading companies, hoping that the latter could use their own stablecoins in addition to Tether.
Gemini isn't the only company doing this, Paxos also offers discounts.
B2C2’s Max Boonen commented in an email: “About $80 million in GUSD driven by temporary incentives.”
However, market watchers say Gemini may not have been selective enough in distributing the discount, as the discounted GUSD fell into the hands of traders who exchanged those dollars one-for-one for other stablecoins, and then transferred the dollars to other stablecoins. converted into profit.
So, what else might be behind GUSD's woes? The answer may have more to do with Gemini's competitors.
Among the stablecoins pegged 1:1 to the U.S. dollar in the current market, apart from USDT, which accounts for half of the cryptocurrency transactions, there are also TrueUSD (TUSD), USDC, PAX and GUSD, which have almost divided up the other cryptocurrency markets.
TrueUSD is a stable currency created and launched by the TrustToken startup supported by the Stanford Venture Fund. It was created in March 2018 and has a first-mover advantage over Gemini.
USDC benefits from the large customer base of its founding teams, Coinbase and Circle. The combined volume of these two companies accounted for 10% of the total cryptocurrency market volume, while the share of the exchange Gemini was only 1%.
As for Paxos, it has improved its instant redemptions and creations. In May of this year, PAX announced to the outside world that it has launched the automatic purchase and redemption function of the USD/PAX trading pair, which means that PAX has become the first to support A stablecoin with instant redemption, immediacy and high financial privacy.
Additionally, all three stablecoins get a benefit that Gemini doesn’t: they’re all listed on Binance, the largest source of liquidity in the entire cryptocurrency market. Binance and Gemini could not agree on the terms of the exchange listing, the people said.
“Binance is a big factor,” one source said. “Liquidity begets liquidity, so apparent differences in momentum can be complicated.”
Whatever the reason for GUSD's plunge, though, market watchers shouldn't underestimate the potential of the twins behind it, Cameron and Tyler Winklevoss, who have been actively working with new partners including Flexa and BlockFi. Sign an agreement to increase the adoption rate of GUSD.
