Recently, eToro’s Senior Market Analyst- Mati Greenspan has pointed out the dominance of the stablecoin in the crypto market, and how they are “eating the market share of crypto volumes.” He based his tweet on the Binance research. Mati is a licensed portfolio manager in the EU, and he handles macroeconomic analysis, cryptos, and other variation in portfolios.
As per the Binance Report, those stablecoins that are supported by USD are enjoying greater adoption and are happily considered for becoming the trading pairs. They are dominating the Bitcoin denominated pairs when it comes to the volume. Although, when it comes to mid-cap stablecoins such as PAX, TUSD or USDC, there are not many differentiations.
The Net Inflows of Stablecoin-
From January to April there has seen net inflows for stablecoins. The first month saw the highest net inflows in comparison to the remaining three months. As per the report, there have been more than 40 million inflows for PAX and USDC around late April. Tether, on the other hand, is drifting from Omni Blockchain to other blockchains. There are chances that we will see that PAX will soon get rolled out on the “Ontology blockchain,” as per Binance Research.
Non USD based Stablecoin-
On the other hand, if we look at the growth of the stablecoin that is not dependent on the USD. It may result in the growth of newer ways of international remittance, safety against risks around fiat risks, a better pricing structure for crypto exchanges that are not based on the USD, and further growth of blockchain based FX exchanges (both on-chain and off-chain ones.)
The role of Social media and other non-financial companies on Stablecoins-
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The Binance report pointed out that there can more growth expected in the stablecoin industry based on the “initiatives” from companies such as Facebook, Samsung, and so on. They based this argument on the fact that such companies have a huge user base and therefore, there is a huge scope of great exposure and so for the growth of the digital asset.
The increasing popularity of the Stablecoin-
From May 2018 to May 2019, there has been continuous growth in the fame of the stablecoin, the report pointed. The “quote asset volumes” that are supported by the stablecoins on the platform have seen a growth from 35.78 percent of volume to more than 60.55 percent. Stablecoins driven quote asset volumes are ruling the Bitcoin denominated and Ethereum denominated pairs. On the other hand, BNB share volume doubled up.
Also, more and more stablecoin pairs were added to the new quotes and base assets. Crypto assets such as NEO, Litecoin (LTC), Cardano (ADA) or Bitcoin Cash (BCHABC) got more trading pairs in comparison to PAX, TUSD, and USDC. Moreover, there has been a large number of assets that were “listed against USDT which is expected to further reduce the percentage of the crypto asset total trading activity from BTC pairs to stablecoin pairs,” the report revealed. The net inflows had more deposits than redemptions in those particular months.
Let us look at the Average Spread and average time-
As per the report, there were very little differences in the “untethered stablecoins.” The average spread, for instance, of BTCUSDT was 0.02 percent, BTPAX had 0.08 percent, BTCUSD had 0.11 percent, BTCUSDC has 0.09 percent, and BTCUSDS had 0.26 percent. If we look at any two fills, the average time has been found to be less than 10 seconds for almost all the stablecoins against Bitcoin. Only StableUSD was an exception in this observation.
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Other topics covered by the report included insights on the addition of new blockchains, the support by Ontology for PAX, more support for new collateral, the role of Facebook coin and Samsung coin, and so on.
