The numbers don’t lie – Coin Metrics is a Boston-based company specializing in the study of data related to cryptocurrencies. His last report (February 2022) offers detailed analysis of stablecoins, developments in Bitcoin, Ethereum and Tezos. The JDC brings you what to remember.
Stablecoins take off
In their analysis of recent on-chain trends in stablecoin activity, analysts Kyle Watters and Nate Maddrey discuss stablecoins, one of the biggest topics of the moment.
A stablecoin – or stable token – is a cryptocurrency whose price is indexed to a fiat currency (currency whose course is imposed by a government, such as dollars). Thus a stable token has certain interests in the blockchain: fast, transparent and secure with one less disadvantage: its volatility.
In one year, in 2021, there were $6 trillion exchange of stablecoins. Additionally, the total supply of these tokens has grown from $28 billion at the start of 2021 to $143 billion at the start of 2022for major tokens tracked by Coin Metrics.
This rise of stablecoins is confirmed by the exponential acceleration of trading. At the end of January more than 500 billion dollars have already been settled with these famous tokens. This is more than in 2021, where this threshold was only reached in mid-February, and much more than in 2020. And let’s not talk about 2019 where over an entire year, only half of this level is reached.
>> Play it safe, register on the reference of FTX crypto exchanges (affiliate link) <<
The stablecoin supply adapts to the demand for cryptos
The main reason for the increase in these exchanges is the increase in supply after 2020 as this graph shows.
In this jungle of stablecoins, it is important to recognize the strongest cryptocurrencies. They are issued and backed by a third party that guarantees you a 1 to 1 ratio, e.g. one USDT equals one Fed dollar. Thus the strongest tokens are BUSD, USDC, and USDT, which account for 90% of market supply.
In short :
- USDT was created on Ethereum, it is the first stablecoin in history and also the leader in terms of capitalization but its guarantee system is more opaque and therefore brings more uncertainty.
- USDC is a stable token issued on Ethereum, by the alliance of Coinbase and Circle within the Center Consortium. He meets all regulations and is fully cash backedtransparently.
- BUSD is the stablecoin of the first centralized exchange platform in the world: Binance
USDC VS USDT, DAI SOON IN THE ARENA?
The USDC no longer nibbles, it devours. Indeed USDC’s market share is growing rapidly and supply now exceeds $44 billionit has thus become the most present stablecoin on the market.
The Goliath Tether, if historically the dominant stablecoin, has found its David. Its demand decreases and its market share is only 50% when you add the 3 different blockchains on which it is present: Omni, Tron and Ethereum. It is important to note that Omni is largely discontinued to make way for Ethereum and Tron.
DAI is a token issued by The MakerDAO, a decentralized entity, unlike other stablecoins. Its decentralization seems to please, the DAI has indeed seen a strong increase in its transfer volume at the end of 2021, who subsequently relapsed. This relapse is certainly due to a move to other chains or overlays thanks to bridges between the networks.
The DAI, which recently had a facelift, is also present in many decentralized finance protocols based on Ethereum, as collateral. It would not be surprising if its recent moves are due to the equally recent downtrend in the markets.
So why are stablecoins used? According to Coin Metrics, data analysis leads to two uses:
- The stablecoin is essential trading aid, it is a safe haven to protect its funds from market volatility. It also allows these funds to be placed in reserve to seize the best opportunities when they arise.
- A refuge, in countries where the currency is collapsing as in Turkey or Lebanon, this allows households to protect their savings and make it transit easily, especially with the arrival of USDT on Tron which drastically reduces transaction costs, there are median transfers of $250.
Multiple ATHs for Bitcoin and Tezos
According to Coin Metrics, Ethereum and Bitcoin see a decrease in their active addresses of 3% and 5.5% respectively. As you know, the markets are gloomy at the start of February 2022 with bitcoin having fallen as low as $32,053.13.
But HUDs are not always visible in the markets, indeed they sometimes hide in the cogs, the submerged part of the iceberg. BTC has reached its highest mining difficulty and highest hashratethe computing power needed to register a new block has never been greater.
When it comes to Tezos, the number of active addresses keeps growing. This is due to the channel updating, halving the time to create new blocks, coupled with growing interest in NFTs, with Ubisoft’s announcement giving them strong publicity. . These two factors logically lead to an increase in transactions containing smart contracts. In one year the number of Tezos addresses has gone from 120,000 to 300,000.
If the BTC and Tezos interest and continue to emancipate themselves, stablecoins are on the rise. Thus they are one of the key subjects present on the table of the legislators who see in them a real competition with their currencies issued from central banks.
Afraid of succumbing to FOMO? Start by making sure you operate in a secure environment, which will allow you to organize a solid investment strategy: Register without delay on the FTX reference crypto exchange platform and benefit from a lifetime discount on your trading fees (affiliate link, see conditions on official website).