Market value breaks through $11 billion: Will stablecoins become the biggest threat to ETH?
Editor's Note: This article comes fromCarbon chain value (ID: cc-value), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Carbon chain value (ID: cc-value)
Carbon chain value (ID: cc-value)
, reprinted by Odaily with authorization.
In recent years, the demand for stablecoins in the crypto market has been growing. For many users, stablecoins are more like a natural extension of traditional finance; but "interestingly", many developers have found that the Ethereum blockchain is developing into the main environment for creating stablecoins.
Recently, Nic Carter (Nic Carter), co-founder of CoinMetrics, an on-chain data analysis company, talked about the role of Ethereum in the cryptocurrency ecosystem and its future impact on the development of stablecoins in an interview with the encrypted podcast program Bankless. Highlighting that stablecoins have gained more market attention in recent years, a trend that has led most cryptocurrencies to understand how to compete with fiat currencies such as the U.S. dollar.
Nick Carter said:
"When it comes to the question of what method and medium of exchange people like to use most to transfer wealth, it seems that the US dollar is still the first choice. After all, the US dollar can still provide enough stability. But whether the US dollar is good or bad, it is now a real question Already surfacing, namely: Can native assets play a role in wealth transfer?"
Bitcoin is the cryptocurrency with the longest history and the largest market capitalization in the world, but Bitcoin has always emphasized the importance of the original blockchain unit—perhaps because of this, Bitcoin has been "confined" in its own in the circle. In contrast, Ethereum is more open, and many stablecoin projects are built on the Ethereum blockchain network.
In terms of tokenization, Ethereum’s attitude has always been very consistent, and this concept has also attracted many stablecoins to migrate to the Ethereum blockchain. But the question is, when there are more and more stablecoins on Ethereum, will people still use the native token ETH?
In 2020, the stablecoin market has experienced explosive growth. The total global stablecoin market capitalization has now exceeded the $11 billion mark, doubling since February:
In January 2020, the global stablecoin market capitalization was slightly over $5 billion;
In February 2020, this figure increased to $5.65 billion;
On March 12, 2020, the "Black Thursday" global cryptocurrency market plummeted, but the supply of stablecoins showed unprecedented growth, and the surge continued;
According to Messari’s stablecoin index data on June 15, the total market value of global stablecoins exceeded $11.28 billion for the first time, which means an increase of more than 100% in just four months.
Should the Crypto Market Be Worried?
According to a recent report from CoinMetrics, the “crazy” issuance of Tether on Ethereum could have a huge impact on the network’s native token, stating:
"Since the beginning of April, the market value of stablecoins has increased by about 1 billion US dollars. Most of the growth has come from Tether (USDT_ETH) issued on Ethereum. Tether's market value was about 4.43 billion US dollars on April 1, and it surged on April 19. To $5.14 billion.”
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(Source of above image: CoinMetrics)
There is no suspense, the current stablecoin Tether (USDT) firmly occupies a large part of the market share, data shows that USDT controls about 87% of the total supply of the stablecoin market. In the second week of February 2020, Tether's market capitalization was only about US$4.66 billion, and its market share was slightly over 80% (about 82%). However, after the collapse of the global cryptocurrency market in March, the market suddenly changed, and Tether began to issue crazily. In April alone, Tether Treasury issued as many as 1.6 billion USDT, and in the first week of May, another 480 million USDT were issued. USDT.
"Interestingly" is that stablecoins such as USDT have also played a role in driving the demand for Ethereum gas, which may force Ethereum to find other new "associations" in order to be used as a means of paying transaction fees on the Ethereum blockchain. a means.
At the time of this writing, Ethereum’s market capitalization was approximately $26 billion. According to this figure, the total global stablecoin market capitalization and Ethereum’s top heaviness ratio (top heaviness) is close to 50%. You will find that Tether is encroaching on the territory of ETH step by step, and other stablecoins have also experienced significant growth in the past four months, such as: TrueUSD (TUSD), Paxos (PAX), USD Coin (USDC) and DAI, among which Circle’s USDC stablecoin controls the second-largest share of the stablecoin market (about 7%), with a total value of $732 million.
The numbers don’t lie, stablecoins are showing very high growth rates compared to ETH, and transaction usage is much higher than Ethereum’s native tokens. Not only that, some stablecoins have become a common settlement method for cryptocurrency exchanges, and some stablecoins have become US dollar substitutes in some jurisdictions.
For now, the value of stablecoins transferred through the Ethereum network has surpassed its own native token ETH, which seems to mark an important step for stablecoins to "trust cryptocurrency".
