The impact of stablecoins on the market

[wilkine]

Stablecoins are increasingly used on public blockchains and have become the primary means of transaction settlement. Despite the relatively stable usage of major cryptocurrencies, the value of transactions in stable coins accounts for the majority of settlements on the blockchain.

This is a very interesting and complex development. On the one hand, the rise of stablecoins in the cryptocurrency ecosystem shows the demand for a more stable and predictable medium of value. This is important for practical business and everyday use, especially in the face of cryptocurrency price volatility.

It has also raised some concerns about whether stablecoins are gradually replacing native tokens, especially for digital gold like Bitcoin. In fact, the use of native assets like Bitcoin and Ether seems to be decreasing, while the use of stablecoins continues to grow.

Overall, this trend shows that the cryptocurrency and blockchain ecosystem is very active and evolving. It also serves as a reminder that as technology and user needs change, we need to be flexible and adapt to new trends and constantly evaluate the role and place of cryptocurrencies in the future.

[Peter90]

Stablecoins are increasingly used on public blockchains and have become the primary means of transaction settlement. Despite the relatively stable usage of major cryptocurrencies, the value of transactions in stable coins accounts for the majority of settlements on the blockchain.

What does it mean?
Can you make an example of a cryptocurrency being used as a transaction settlement?

[Gm Jutt]

Stablecoins are really helpful for businesses and everyday use because they are more.... stable than other cryptocurrencies. This stability makes people trust them more... and want to use them for transactions.

But some people are worried because stablecoins are becoming more popular for transactions... and they might replace other cryptocurrencies... like Bitcoin. It is interesting to see that people are using native assets less while stablecoins are getting more popular. This makes us wonder... what will happen to cryptocurrencies in the future... especially ones like Bitcoin that are seen as digital gold.

[MrSpasybo]

Stable coins usually have a constant value compared to fiat, and that creates their value in the market.

Stable coins are the simplest way for a new investor to enter the crypto market: they use fiat to buy stable coins and find opportunities. So we can observe stable coin's Cap to determine investor interest in market. Currently, the stable coin's Cap has increased from $121B to $128B, suggesting the possibility that crypto market has reversed from a decrease to an increase.

Stable coins are also a safe haven for investors as soon as they exit crypto without wanting to leave market. Without stable coins, entering the market would be extremely risky.

Stable coins make market easier to understand and have better liquidity: compared to the period before 2017, traders can only participate in ALT/BTC and BTC/USD pairs, which is really inconvenient when they want to calculate profits in fiat. Currently, the Vol of ALT/stable coin pairs is dominating, showing that stable coins continue to be chosen by investors.

Stable coins are also involved in lending services, margin, futures... I really can't predict how bleak these markets would be without stable coins.

[gunhell16]

Well, honestly, stablecoins help me number one when I do a P2P transaction because they need to be converted to USDT. In addition, when I do trading activity, I also use stablecoins for the crypto that I trade on an exchange.

In short, the contribution it makes to the crypto market is still great; it cannot be said that it is not, because stables can be used in all aspects of transactions in any network that an individual user will use in the crypto space.

[hugeblack]

StableCOINs play the role of an intermediary in the event that the user wants to trade and does not want to withdraw for cash, but it is rare for anyone to use them as a long-term investment, as it is better and safer to withdraw to the dollar instead of taking risks using stable currencies, especially after the famous LUNA incident.
I do not expect there to be a boom in these currencies, especially since their number is limited compared to cryptocurrencies.

[Carbitcoin]

StableCOINs play the role of an intermediary in the event that the user wants to trade and does not want to withdraw for cash, but it is rare for anyone to use them as a long-term investment, as it is better and safer to withdraw to the dollar instead of taking risks using stable currencies, especially after the famous LUNA incident.
I do not expect there to be a boom in these currencies, especially since their number is limited compared to cryptocurrencies.

Stable coins are a guarantee of confidence in the safety of your assets. To a greater extent, traders use stable coins when the market is falling

[hugeblack]

Stable coins are a guarantee of confidence in the safety of your assets. To a greater extent, traders use stable coins when the market is falling

Yes, they are used as a quick tool to stabilize profits and buy back again when the price drops, but because they are centralized and because most of them can freeze or delete currencies inside the wallet, no one can trust them in the long term, especially because it is difficult to sue companies in the event of losses.

So, with the exception of DAI, and since all of these currencies can freeze your funds inside the wallet, it is better not to trust stablecoin.

Read more ---> Privacy and Cryptocurrency, Part IV: Stablecoins— Blacklists and Traceability

[bitmover]

Stable coins are a guarantee of confidence in the safety of your assets. To a greater extent, traders use stable coins when the market is falling

Yes, they are used as a quick tool to stabilize profits and buy back again when the price drops, but because they are centralized and because most of them can freeze or delete currencies inside the wallet, no one can trust them in the long term, especially because it is difficult to sue companies in the event of losses.

So, with the exception of DAI, and since all of these currencies can freeze your funds inside the wallet, it is better not to trust stablecoin.

Read more ---> Privacy and Cryptocurrency, Part IV: Stablecoins— Blacklists and Traceability

Very informative chart.

OMNI layer is basically inactive now, and it used to the Tether's biggest market share (it was the first one).

I think this is just abandoned, and all those "No" might mean that.

this explorer used to be filled with USDT transaction, but not anymore
https://omniexplorer.info/

[Geey]

In my opinion, bitcoin will never be replaced by coins, because bitcoin is the top currency in the cryptocurrency world. Are you sure that the coin you are talking about will replace Bitcoin as the top currency, I don't think it's possible. Even though the coin you say is used by many people, you have to also see how Bitcoin stands quietly at the top, because Bitcoin is an old coin and has developed in the past and even now.

[tranthidung]

So, with the exception of DAI, and since all of these currencies can freeze your funds inside the wallet, it is better not to trust stablecoin.

Proofs of their freezes on stable coins.

• https://dune.com/phabc/usdt---banned-addresses
• https://dune.com/phabc/usdc-banned-addresses

Some reports on Tether USDT, a biggest stable coin.

• Stablecoins: A deep dive into daluation and depegging
  
  • Download
• Independent Auditors' Report on the Consolidated Reserves Report
• https://tether.to/en/transparency/#reports

Read the Appendix to see summary of their price histories, from page #20.

[hugeblack]

this explorer used to be filled with USDT transaction, but not anymore
https://omniexplorer.info/

You are correct and the reason for this is the high fees, as every USDT transaction on the Bitcoin blockchain (omni layer) requires the same fees as Bitcoin transaction. Imagine that you want to send 10 USDT and pay about 60 dollars in fees.
But the importance of the above chart is that, with the exception of DAI, all stablecoins can be frozen or deleted even if they are in your wallet.

Proofs of their freezes on stable coins.

USDT is currently cooperating with several regulatory authorities to freeze USDT that are hacked, but who knows what will happen in the future.

[bitterguy28]

Stablecoins are increasingly used on public blockchains and have become the primary means of transaction settlement. Despite the relatively stable usage of major cryptocurrencies, the value of transactions in stable coins accounts for the majority of settlements on the blockchain.

This is a very interesting and complex development. On the one hand, the rise of stablecoins in the cryptocurrency ecosystem shows the demand for a more stable and predictable medium of value. This is important for practical business and everyday use, especially in the face of cryptocurrency price volatility.

It has also raised some concerns about whether stablecoins are gradually replacing native tokens, especially for digital gold like Bitcoin. In fact, the use of native assets like Bitcoin and Ether seems to be decreasing, while the use of stablecoins continues to grow.

Overall, this trend shows that the cryptocurrency and blockchain ecosystem is very active and evolving. It also serves as a reminder that as technology and user needs change, we need to be flexible and adapt to new trends and constantly evaluate the role and place of cryptocurrencies in the future.

I am not sure about what you are calling in Ethereum and Bitcoin that decreasing their uses because mostly people are receiving major coins first before converting in to stable coins and even those who holds stable coins are just readying for chances to buy crypto currencies again and just using stable coins for temporarily holding to wait and buy easily with the help of this coin.

[Learn Bitcoin]

Honestly, I cannot imagine the market without a stablecoin. How would we trade our cryptocurrencies without these stablecoins? But there are some issues as well. We don't know if these stablecoins could be depegged one day. Just like Terra USD was depegged and it never gained its peg again.

Some stablecoins were already depegged, and they didn't get their peg again. Here is the list of some stablecoins;

https://coinmarketcap.com/currencies/terrausd/
https://coinmarketcap.com/currencies/usdx-kava/
https://coinmarketcap.com/currencies/usdk/
https://coinmarketcap.com/currencies/fei-usd/
https://coinmarketcap.com/currencies/usdh/

[Aanuoluwatofunmi]

That's true, we all have to be dependent of the use of stablecoin in one way or the other, this must be well understood by those that engage doing trading, they would have preferred using stablecoin to trade any coins they intended to buy because of the advantage of being pegged to the value of the united state dollars, this equally means that stablecoin could also be as volatile as when the USD changes in market price or value.