Data shows: USDT dominates the stablecoin market, but fails to affect Bitcoin trading volume
Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: MARCEL PECHMAN, reprinted by Odaily with authorization.
Editor's Note: This article comes fromUSDTCointelegraph Chinese (ID: CointelegraphChina)
Cointelegraph Chinese (ID: CointelegraphChina), Author: MARCEL PECHMAN, reprinted by Odaily with authorization.Over the past 18 months, Tether (
) stablecoins have been the main underlying trading pair for cryptocurrencies.USDC），TrueUSD（TUSDconsideringPAXTether's Ongoing Court Case With New York Attorney General
, and other rumors that USDT does not have sufficient reserves or is not regulated by relevant agencies, this is quite an impressive achievement.
) and Paxos Standard (
) and other competitors had a total capitalization of $520 million in June 2019. During the same period, USDT’s market capitalization has surpassed $3.1 billion.
Over the past 15 months, Tether's market cap has increased to $15.7 billion, compared with $4.1 billion for its four largest competitors. Regardless of whether USDT is backed by sufficient U.S. dollar reserves, USDT occupies nearly 80% of the market share among all fiat currency-backed stablecoins.
A nearly identical picture was seen in terms of trading volume, with Tether dominating with a 75% lead.
Base Cryptocurrency Trading Volume Source: CryptoCompare
According to data from CryptoCompare, USDT has captured nearly 73% of the market in the past three months. Before investigating further, it is important to point out that the data varies according to different data providers, as some exchanges are often excluded due to lack of transparency.
Despite some differences, Constantine Tsavliris, head of research at CryptoCompare, explained:BTC“In terms of exchanging Bitcoin to USDT or other similar stablecoins such as USDC or PAX, we did not see a large change in transaction volume.”
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Stablecoin corridors have nothing to do with Bitcoin's price
) as the main gateway for cryptocurrencies. For most traders in 2017 or 2018, this may have been the only solution, or at least the most liquid, but as the stablecoin market grew, altcoin USDT trading pairs skyrocketed.
As stablecoin trading volumes increase, altcoin-stablecoin trading pairs are also more widely issued. This trend accelerated as Coinbase, Huobi and Binance launched their own stablecoins.
It would be a mistake to think that the dwindling use of Bitcoin as the main on-ramp of the cryptocurrency is detrimental to the price of Bitcoin. Those who acquired Bitcoin as a tool for changing hands may have increased the volume of Bitcoin, but then sold it for the same amount in exchange for altcoins.LINKFurthermore, even with stablecoins as the primary on-ramp solution, eventually, some of the traffic will spill over to Bitcoin. Also, most crypto assets are not direct competitors to BTC for store of value and scarcity.
Chainlink inflows and outflows over the past 24 hours. Source: Coinlib.io
For example, the graph above shows the past 24 hours from Chainlink (
) to BTC outflows of $26.6 million. A similar trend was observed for the rest of the altcoins, suggesting that Bitcoin has not lost volume as stablecoins became the dominant underlying trading pair.
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7-day average trading volume for crypto markets. Source: TradingView
Even for traders who lived through the bubble of late 2017, the chart above may come as a surprise. The daily average peak of $36.6 billion in January 2018 may have been too high at the time, but it is still quite low compared to the current level of $100 billion.Whether or not fake volumes affect this view, we can see that there has been a considerable increase in volume proportionally. This growth in trading volumes coincides with stablecoin issuance, which has grown from $3.6 billion in June 2019 to the current $18.9 billion.。
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MicroStrategy co-founder and CEO Michael Saylor sees BTC’s primary use as a reserve currency. therefore,
It cannot compete with tokens like Ethereum (ETH) and stablecoinsNomics
Unlike traditional market capitalization-based data on bitcoin dominance, Saylor’s analysis only includes proof-of-work-based coins.
Even when Bitcoin’s trading volume is compared to the broader asset class, it is comparable to the top 20 altcoins combined when analyzing transparent trading volume.
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