Since Bitcoin has, apparently, found a local High, directed all the eyes in the crypto space is currently on the stable coins, digital Assets that are tied to a “stable” Reserve Asset (to be secured in the U-dollars) and by this. Although you are for 2017 and 2018 in the crypto currency industry presence, have won the stable coins in the last few months is becoming increasingly important for the market due to the increased volatility. Your offer has greatly increased.
In fact, the value of all outstanding stablecoins has exceeded according to the latest data from the Blockchain Analytics company Coin Metrics for the first Time ever, the 9 billion Dollar mark. Particularly interesting about this statistic is that six weeks ago, the total value of all stable coins amounted to 6 billion dollars. This is a 50% growth within one and a half months, which makes it clear that not only Central banks to have their money printers running at full speed. The usual narrative says that this is for the crypto-market bullish; investors say that the increase in the Stablecoins indicating that the money is ready to flow into Bitcoin, Ethereum and other cryptocurrencies.
A new report by economists has, however, indicated that this story is 100 percent true. In a note with the title “stable coins don’t inflate crypto markets” (stable coins in the crypto-markets are not in bubbles), which was published in the business research Blog, VOX, disagreed with Richard K. Lyons, and Ganesh Visawanath-Natraj – from UC Berkeley or the Warwick Business School – the theory that stable coins “will push to the side line of” Bitcoin to the top. The core of their reasoning is two graphs that examined the average Performance of both Bitcoin as well as Ethereum – two of the largest crypto-markets of USDT – in the Wake of the issue of Tethers were formed. They found that there was from August 2017 to February 2019 in the three weeks after the issuance of the USDT coins no obvious positive Trend in the prices of BTC and ETH.
In fact tended to Bitcoin on the average of the examined time-frame immediately after the coinage by Tether low, although this Trend may be due only to the fact that the observed period of the bear was marked Trends. It is noteworthy that the collected data take into account the last few months, the largest growth spurts in the USDT all times contained and your Thesis and conclusion to be distorted could have. Nevertheless, they came to the following conclusion:
This column is a series of questions to be answered to the question of whether stable coins currencies, and an inflationary effect on the prices of Crypto. The conclusion: We find no systematic evidence that the stable output of coins, the impact on the prices of crypto. Rather, our evidence in support of alternative views“.
So what’s behind this Trend?
This raises the following question: If there are buyers, the Bitcoin want to buy, who or what is behind the rise in demand for stable coins? In your opinion, is the imprinting of stable coins coincides with “deviations of the secondary market rate” of USDT compared to the linked exchange rate of 1 USD, suggesting that it arbitrag are the the stock of stablecoins to rise. This, according to the Economists, is a sign that Tether acts in contrast to “real” Dollars as a reserve currency for investors in crypto-currencies:
In risk, some investors will be periods decide to swap in a better store of value. The rebalancing of the portfolio in the direction of the Tether and other stable coins offers this function at a minimal cost of intermediation.