• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Win 1 BTC
  • Play Finance
Breaking News: Breaking: Arbitrum Announces The Launch Of Its New Token ARB, Transitioning To DAO
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Win 1 BTC
  • Play Finance
Bitcoinist.com
No Result
View All Result
Breaking News: Breaking: Arbitrum Announces The Launch Of Its New Token ARB, Transitioning To DAO
Advertisement

This Unexpected Factor Presents a Long-Term Risk to Ethereum’s Value: Analyst

Nick Chong by Nick Chong
3 years ago
in Ethereum
0
Advertisement

Over the past few weeks, Ethereum has been benefiting from a surprising trend: stablecoins, which have recently passed $9 billion in aggregate value. Although some of these stablecoins are based on Binance Chain, Bitcoin, or other networks, Ethereum has been the primary home for stablecoins, namely Tether’s USDT.

Don't wait! Jump on this Crypto Deal and get a 150% Welcome Bonus plus 100 Free Spins on your deposit today!

In fact, data suggests that due to the concentration of stablecoin use on the network, the total value of coins transacted on Ethereum has begun to rival that of Bitcoin, despite the former having around 15% of the value of the latter. As Ryan Sean Adams, founder of Mythos Capital explained:

“In Feb 2016 the reserve asset of Ethereum traded at $2. If I told you then that 4 yrs later this network would host over $9b in stablecoins & that’s just one of its promising use cases you have been blown away. You would have backed up the truck. That’s how I feel about ETH today.”

But some are saying that this sentiment is incorrect.

USDT Is a Threat to Ethereum: Analyst

Many have taken Ethereum’s primacy in the stablecoin space as a positive sign, saying that it should only accentuate the demand for ETH. But an analyst has suggested that the fact USDT has become so important to the blockchain is a threat. It’s a surprising assertion for sure, but it’s an opinion backed by evidence.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
570% up to 12 BTC + 300 Free Spins for new players & 1 BTC in bonuses every day, only at Wild.io. Play Now!

Ryan Watkins — an analyst at crypto research firm Messari — explained on April 22nd that Tether poses a long-term “threat” to ETH.

Watkins attributed this thought to the fact that if stablecoins continue to be the primary value transfer mechanism on the network, Ethereum’s monetary premium, its position as a potential form of money, may devolve into its “naive early branding of digital oil” and lose much of its value as a result.

Tether Doesn’t Even Help Bitcoin

That begs the question: how does USDT’s popularity affect Bitcoin? Will more of the stablecoin coincide with higher prices in the crypto market? According to a new report, no, USDT’s effect on Bitcoin is seemingly neutral.

In a VOX (research journal focused on economics) note titled “Stable coins don’t inflate crypto markets” Richard K. Lyons and Ganesh Visawanath-Natraj — of UC Berkeley and Warwick Business School, respectively — explained that Tether doesn’t naturally “inflate” Bitcoin’s price.

The core of their argument came down to the two charts seen below, which depict the average performance of both Bitcoin and Ethereum — two of USDT’s biggest crypto markets — in the wake of Tether’s issuance of coins. The charts show that the two leading cryptocurrencies have no obvious trend following USDT issuances.

BTC and ETH Response to USDT Issuance

With this in mind, they came to the following conclusion:

“This column answers a series of questions relevant to whether stable coins have an inflationary effect on crypto asset prices. The bottom line: We find no systematic evidence that stable coin issuance affects cryptocurrency prices. Rather, our evidence supports alternative views.”

Photo by Glenn Carstens-Peters on Unsplash
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.

Nick Chong

Nick Chong

I am a writer who has been following Bitcoin for many years now. My pieces and interviews have been featured in leading publications in the industry such as LongHash and Decrypt. I own a small amount of Bitcoin.

Related Posts

Ethereum

Ethereum Fee Remains Low Despite Price Rise, Here’s What It Means

16 hours ago
Ethereum

Ethereum Price Plummets As Whale Transfers $33 Million ETH To Binance

2 days ago
Grayscale Postpones Date For ETHPoW Review And Sales Decision

Grayscale Postpones Date For ETHPoW Review And Sales Decision

3 days ago
Polygon Ethereum

Ex-Ethereum Foundation Developer Joins Polygon

3 days ago
Ethereum Whale Shark

Ethereum Sharks Accumulated In Past Year, But Whales Sold: Santiment

4 days ago
Ethereum hits record high

Ethereum Deflation Hits Record High Six Months After Merge, What This Means For ETH

6 days ago
Please login to join discussion

Premium Partners

Premium Casino Partners

Play Finance

Top Casinos

BitStarz
BitStarz
Punt Casino
Punt Casino
mBit
mBit
1xBit
1xBit
Coinplay
Coinplay
K8
K8

Sportbooks

Coinplay
Coinplay

Press Releases

  • Cryptocurrency News Today: Shiba Inu Burns Tokens While...

    12 hours ago
  • Vote-to-Earn Project Love Hate Inu Raises $1 Million &...

    17 hours ago
  • Get Ready to Save Animals and the Environment with...

    21 hours ago
  • Investors Turn to TMS Network (TMSN) As Tron (TRX) And...

    21 hours ago
  • Investors Have Lost Confidence in Solana (SOL) And Ripple...

    21 hours ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
  • Crypto Prices from Nomics
© 2023 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Win 1 BTC
  • Play Finance

© 2022 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.