Markets and Prices

When Bitcoin Overtakes Gold – How High Can It Go?

11/11/2019 by Idelto Editor

Flashy bitcoin price speculation is a favorite game of crypto Twitter news outlets and commentators all over. After all, who doesn’t want to hear that their modest stash of satoshis could someday moon and be worth millions? Sensation aside, there remains a well-grounded case for continued rise in price where top cryptos are concerned, and should bitcoin’s market cap overtake that of gold — an asset limited in many ways compared to crypto — prices could indeed be out of this world.

Also Read: For Initial Exchange Offerings, Liquidity is King

Gold’s Market Cap and Surrounding Contention

Gold’s global market cap currently sits at around $8 trillion. Last year, at this time the precious metal’s capitalization sat closer to $7 trillion. As fiat paper worldwide continues to be devalued by governments and their reckless economic policies, many goldbugs see the upward trend continuing, and they may be right. Habitual bitcoin detractor and well-known gold enthusiast Peter Schiff has made a name for himself in making such predictions. What’s not talked about as often in precious metals circles are the very real physical limitations that come with the beautiful asset in regard to its function as money.

While Schiff’s frequent criticism of the U.S. Federal Reserve is well-received by many in the crypto space, his attacks on bitcoin and the views of crypto influencers and innovators such as Bobby Lee are generally not. Lee, CEO and founder of the Ballet Crypto physical crypto wallet and brother of Litecoin creator Charlie Lee, recently predicted that “the #flippening will happen within 9 years and $BTC will shoot up past USD $500,000.”

#Gold is at about $8 trillion today, which is 50x the worth of #Bitcoin.
I predict the #flippening will happen within 9 years and $BTC will shoot up past USD $500,000.
And with all of the money printing that’s happening globally, $BTC will actually very likely be over $1 million! https://t.co/hbqGze38k5

— Bobby Lee – Ballet: Simple & Elegant Wallet (@bobbyclee) November 10, 2019

Like Schiff, Lee cites irresponsible economic policies as a contributing factor to the rise of his favored asset class. Unlike Schiff, however, Lee doesn’t view crypto as “fool’s gold” people should run from. Indeed, one of the main perceived strengths of bitcoin and crypto is that unlike gold, it has an extreme advantage in ease of transfer and portability. It’s no small feat for someone out of country to send a couple bars of gold to family back home. It’s heavy, significant fees will be charged, and applicable state regulations must be cleared. Crypto, on the other hand, has the ability to be sent for negligible fees instantly, without “necessary” or built-in interference from a third party or regulator.

Should Bitcoin Overtake Gold

Charlie puts BTC at a possible $500,000 in nine years. Notably, a recent statement from Bitcoin.com Executive Chairman Roger Ver, made in conjunction with a unique Facebook giveaway, suggested that BCH could also achieve new heights:

If I’m already friends with you on Facebook, post your Bitcoin Cash address and I will send you $5 worth of Bitcoin Cash that could easily become worth $5,000 some day. If I’m not already friends with you on Facebook, post your Bitcoin Cash address anyhow, and I will still send you $1 that could easily become $1,000 some day.

So what would prices look like if bitcoin did overtake gold in market cap? Well, as price is ultimately the product of myriad market variables and ever-changing economic context, such predictions are not easy to make in spite of how often they’re put out there. Still, basic calculations via market capitalization can be done assuming things don’t change too drastically much regarding current applicable factors.

If, for example, one of the top coins flipped gold’s current market cap of ~$8 trillion, the resultant price would be impressive. With a circulating supply of 18,040,537 BTC at press time, a market cap for BTC of $8 trillion would result in a single coin worth about $443,400. Even assuming the “flippening” doesn’t take place until the hard cap of 21 million coins in theoretical circulation is reached, a price of around $380,000 results. Should bitcoin cash (BCH) flip the market cap of gold given current data, the resultant price is a shimmering $441,800 per coin. None of this is to factor in changes in demand, tech innovation, adoption, etc., for better or for worse. Considering the amount of excitement and FOMO likely to occur in such an event, prices would likely be much, much higher.

While these numbers might seem “far out” upon first encounter, it’s important to note that BTC achieving dollar parity was a big deal less than nine years ago in February, 2011. BTC, worth $1 then, has since increased by about 900,000%, bringing us to the current price.

Other Metrics

A September 2017 report by the National Bureau of Economic Research states that “The equivalent of 10% of world GDP is held in tax havens globally,” and with part of crypto’s appeal itself as an “offshore haven” of sorts (although admittedly one that is drawing much heated attention from powerful government agencies such as the IRS and FBI) it’s interesting to look at bitcoin potentially replacing these tax havens’ share of value, if only as a thought experiment. The projected global gross domestic product (GDP) for 2019 according to IMF and United Nations aggregated data was set at ~$88 trillion last year. Should BTC, BCH, or BSV flip 10% of this amount today, with current circulating supplies of about 18 million each, the resultant value would be a token worth ~$488,888, not far from Bobby Lee’s prediction regarding bitcoin flipping the market cap of gold.

Other typically hot topics include bitcoinization and hyper-bitcoinization, whereby bitcoin overtakes the dominant currency in a given region or overtakes and makes obsolete the currencies of the whole world. The nearly $4 trillion world reserve currency USD circulating in the current M1 money supply would require each bitcoin (whether bitcoin cash, core, or BSV), at a roughly calculated circulation of 18 million, to be worth about $222,000 in order to serve as a replacement for M1. Swiss multinational bank UBS put this figure at $213,000 over the summer, prior to continued expansion of the monetary supply. Of course, none of this includes the massive amounts of debt and credit on the books in USD as well, which would further dynamize and shape bitcoin price in a hyperbitcoinization event, resulting in astronomical price changes the likes of which likely defy speculation, due to the confluence of cultural and socioeconomic changes that would result from such a financial earthquake.

A Grain of Salt Goes a Long Way

There’s little easier than making ear-tickling predictions about the riches just around the corner for anyone holding even a small amount of crypto. Should the forecast fail, just chalk it up to unpredictable markets and shout out a new one with equally impassioned bluster next week. Should it succeed, be sure to remind everyone of how you “totally called it” with that “Feeling bullish” tweet two days ago. This isn’t by any means to say that predictions are bad, only that the overconfident and suspiciously detailed ones don’t usually seem to pan out.

While markets really are sometimes anyone’s guess, there are yet sound economic principles and hard realities which can be used to make valuable observations. As fiat currencies and governments worldwide continue in their seeming endless love affair with reckless debasement, the underpinning principles of limited supply, permissionless crypto assets with competitive utility continue to convince many that the flippening may be just around the corner.

What are your thoughts on bitcoin’s potential to “flip” gold? Let us know in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

Images credits: Shutterstock, fair use.

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How Crypto Winters of Bitcoin’s Past Compare to Today

08/11/2019 by Idelto Editor

Cryptocurrency and bitcoin proponents have been patiently waiting to see if crypto winter is returning as the recent price decline has shaken investors. Digital assets have been meandering aimlessly over the last week and in order to gain some perspective, it’s always good to study the last decade of previous bear market trends.

Also read: China Removes Bitcoin Mining From Unwanted Industries List

Crypto Prices Slide Again, Making Traders Question Whether Crypto Winter Is Really Over

After BTC and other digital currencies touched all-time highs in 2017, the following months ushered in ‘crypto winter.’ It was a cold period of time where crypto investors watched their favorite cryptocurrencies lose 70-95% in value. Since then, prices have headed northbound and many people started to assume that the bearish crypto winter may be coming to an end. However, after BTC jumped from the $3k range to almost $14k in the spring, the digital currency has dropped to the $7k zone and is now hovering between $8,800-9,150. Overall, most traders would consider the overall upswing bullish as BTC was $6,350 on November 8 last year and today the price is $8,942 per coin. But many crypto winters in the past and bearish cycles have seen slight upswings before plummeting back down and continuing an even longer bear market trend. The recent decline in crypto values has caused some digital currency investors to panic and current prices have made them wonder if more trouble lies ahead.

How Crypto Winters of Bitcoin's Past Compare to Today — At the moment, cryptocurrency prices seem bearish.

The first long bear market that BTC fans witnessed was between June to November in 2011 that spanned roughly 162 days. The digital currency’s value had spiked in the summer of 2011 to a high of $31.50, but subsequently dropped over the course of the next few months to a low of $2.01 per BTC, losing 93%. At this time, things started looking positive for BTC investors similar to the run-up in 2019. BTC was hovering around $7.08 per coin on January 11, 2012, gaining more than 250%. But thanks to all the exchange hacks in 2012 like Linode and Bitcoinica and the regulatory issues with the platform Trade Hill, BTC’s price dipped into a bear market trend for roughly 185 days, losing 40%. In July 2012 the price per BTC was $4.22, but again traders started seeing bullish trends transpire and the value jumped 216% to a high of $13.35 per coin in August.

Just like the current 2019 bear raid, crypto traders saw BTC prices slide 37% to a low of $8.40 during the first week of December 2012. The duration of the rout lasted 111 days and was allegedly initiated by the second Bitcoinica hacks and the lawsuits surrounding the events. However, the following January to November 29, 2013 saw BTC values jump considerably again touching a peak price of $1,166. The first recorded price on Coinmarketcap.com’s historical price index shows BTC was $135 in April 2013. However, the party ended in December 2013 and the onset of the first extremely long crypto winter started eating away at the bullish prices. The bear market stretched for 410 days encompassing 2014 in its entirety. Moreover, other digital currencies that saw higher prices also followed BTC’s dive as most cryptos that year lost more than 80%. After the $1,166 high, BTC dropped to a low of $197 per coin during the first week of January 2015. From that period in time, anyone could have purchased BTC at prices between $197 to $300 up until October 28, 2015.

BTC prices starting from Halloween to mid-June 2016 were between $300 to $600 and the coin started inching its way closer to the 2013 all-time high (ATH) in January 2017. After that price surpassed the 2013 ATH, BTC and many other cryptocurrencies saw a climactic run up from that point forward. On the exchange Bitstamp, BTC touched its highest position ever at roughly $19,650 per coin. The bear market that followed lasted much longer than the 2013-2015 downtrend of 410 days. Coincidently, using that same timeframe from December 2017 to the first week of February 2019 saw BTC prices reduced to $3,484 per coin that week. The bear market stretch continued, making the crypto winter following 2017 the longest ever. Between February through May 2019, prices hovered around $3,500 to $6,000 and the run-up since then looks like a second breath of fresh air.

The latest downtrend has dampened enthusiasm throughout the crypto community after BTC values were hovering around $10k, but are now below the $9k region as prices sink lower. The last few months have seen digital currencies traverse upwards in a bullish manner, but prices could easily follow the same dynamics that transpired years ago. The bear markets in the past did see some positive optimism after BTC’s value plummeted, however, some of the run-ups didn’t last very long. Digital currencies had a much better year in 2019 but as the end of the year approaches, people are still uncertain about how crypto markets will trend over the next month and a half into 2020.

Where do you see cryptocurrency and bitcoin markets heading from here? Let us know what you think about this subject in the comments section below.

Images via Shutterstock, Trading View, Atlas, Markets.Bitcoin.com, and Pixabay.

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Market Outlook: Crypto Prices Consolidate as Economic Uncertainty Looms

28/07/2019 by Idelto Editor

Digital currency markets have been meandering sideways for a few days as most of the top crypto prices have been consolidating. Some traders believe there will be a big bullish rise after the current slump, while others think crypto prices may sink even lower. Amidst the crypto market uncertainty, economists worldwide are predicting a great recession looming in the backdrop.

Also Read: 10,000 American Cryptocurrency Owners Will Receive Warning Letters From the IRS

Persistent Consolidation

On Sunday, July 28 the entire market capitalization of digital assets is around $263 billion and there’s been $43 billion in 24-hour global trade volume. Digital currency market caps, individual coin prices, and overall global trade volumes have dropped significantly since June. Currently, the price of bitcoin core (BTC) is hovering around $9,500 with around $13 billion in daily trade volume. During the early morning trading sessions on July 28, more than 68% of BTC trades are paired against tether (USDT).

Following BTC’s lead, ethereum (ETH) holds the second largest valuation as each ETH is swapping for $209. Ethereum markets have roughly $5.7 billion worth of Sunday’s overall trade volumes. Ripple (XRP) is still hanging tight in third position and each XRP is swapping for $0.31. At the time of writing, there’s only $841 million in global trade volume for XRP. The fourth largest market valuation belongs to litecoin (LTC), which has seen around $2.3 billion in daily trades. Each LTC is trading for $89 per coin and a market cap of about $5.6 billion. Lastly, bitcoin cash (BCH) is hovering around $307 and there’s been $1.2 billion swapped in the last day. BCH has a market valuation of around $5.4 billion this Sunday.

Mike Novogratz Predicts BTC Prices Could Surpass $20K by the Year’s End

Despite all the recent red within the crypto charts, many enthusiasts are expecting a return to green in the long run. A number of digital asset supporters suspect that institutional interest has entered the crypto scene and Galaxy Digital CEO Mike Novogratz believes BTC will surpass its all-time highs this year.

During his interview with Bloomberg on July 25, Novogratz opined that there’s a good chance that BTC will consolidate for a while but by the end of 2019 he thinks the price could blow past $20,000. The Galaxy Digital CEO said it was also exciting to see the upcoming launch of Facebook’s Libra project and Telegram’s digital currency as well. Novogratz thinks that because these platforms already have a large user base the experiment will be interesting.

“In about two or three months Telegram is launching their blockchain,” Novogratz explained. “Telegram is about 218 million users — So before Facebook launches we are going to have a real view at an experiment called Telegram, where they also have a user base.”

Bitcoin Cash Market Indicators Show a Possible Breakout Imminent

A few crypto traders eyeing the price of bitcoin cash (BCH) believe that there could be a breakout in the near future. A technical analysis published on July 27 insists that the bullish trend is currently “very strong on bitcoin cash.” “As long as the [BCH/USD] price remains above the support at 312.38 USD, you could try to benefit from the boom — The first bullish objective is located at 318.18 USD — The bullish momentum would be boosted by a break in this resistance. Buyers would then use the next resistance located at 325.51 USD as an objective,” the analysis reads. The technical price examination continues:

Crossing it would then enable buyers to target 332.33 USD — Be careful, given the powerful bullish rally underway, excesses could lead to a possible correction in the short term. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating a reversal of the trend.

Another BCH/USD price forecast written by Saad Murtaza on the same day shows similar findings. Murtaza’s data shows that the price of BCH is breaking against BTC. Murtaza emphasizes that the recent BCH price increase has taken the price action above the 10-day moving average (MA). But the price fell short when it reached the 20-day MA and it’s been trading sideways ever since. “This has caused the ten-day MA to increase and is possibly going to push the price for a breakthrough above — The same thing is happening to the MACD and supported by the RSI across all short-term charts up till 12-hour frames.” Murtaza’s analysis noted. “A breakout may occur soon; however, the ascending triangle shows strong resistance. If price breaks above, it will demolish the previous resistance as well as it coincides with the triangle’s resistance.”

Grayscale Research Finds 36% of American Investors Consider Buying Bitcoin

Grayscale Investments and Q8 Research released a study this month which surveyed a group of 1,100 U.S. investors. Within this portion of the investment community, the survey found that more than a third (36%) of investors would consider an investment in bitcoin. The study reveals the majority of the investors who participated (83%) were “strongly motivated by the idea that they could invest small amounts in bitcoin today.” “Since its introduction in 2009, bitcoin has steadily grown in popularity and today has expanded its reach to a broad mainstream audience,” the research report explains. The Grayscale and Q8 Research study adds:

Investors are constantly looking for new ways to diversify their portfolios as traditional assets and markets have begun to move more closely in sync with one another. Increasingly, savvy investors recognize that bitcoin and other digital currencies may have unique investment characteristics that provide diversification far beyond the basic 60% stock/40% bond portfolio allocation.

Global Economists Fear Recession Is Looming in the Backdrop

Headlines concerning the world economy continue to hint at an impending recession and economic turmoil. In Hong Kong during the protests, the country’s Finance Secretary Paul Chan told the public this week the protesting has caused unemployment and hurt local businesses. “For foreign tourists and enterprises, the unrest in Hong Kong dampens their appetite for traveling and investment,” Chan’s translated statements detail.

In the U.S., economists fear the American economy is on the brink of recession despite the nation’s gross domestic product increases. This is because economists believe the Federal Reserve is poised to lower interest rates soon. Meanwhile, in the U.K., political economists think a no-deal Brexit is on the horizon according to U.K. Prime Minister Boris Johnson’s statements. Reports state that the region is preparing a no-deal Brexit because the European Union does not plan to renegotiate the prior withdrawal agreement. The looming global recession has fueled the spot gold markets as having consolidated above $1,400 per troy ounce of .999 fine gold.

Similarly, cryptocurrencies touched 2019 all-time highs in June and most have consolidated after a slight correction. Digital asset prices are still far higher than they were in January and many top coins have steadily increased month after month. No one really knows how the predicted global economy’s recession will affect digital currency markets, but typically during these times of hardship, the price benefits. This was the case for bitcoin markets during the crisis in Cyprus, Greece, and the last Brexit. So far, most of the top assets are moving sideways and it’s likely big players are finding new positions. Besides the last few days of sideways action, over the last few weeks, digital asset markets have been awfully volatile, playing out a crypto game of musical chairs. Depending on who you ask, traders predict BTC prices could drop to between $7,000-8,000, while others believe markets will see an upward trajectory toward $14K.

Where do you see the price of bitcoin cash and the rest of the crypto markets heading from here? Let us know what you think about this subject in the comments section below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Prices and data were recorded on Sunday, July 28, 2019 at

Images via Shutterstock, Trading View, Bitcoin.com Markets, Grayscale, and Pixabay.

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Bitcoin Futures Update: Bakkt Testing, CME Breaks Records, and a $100K Call Option

23/07/2019 by Idelto Editor

Over the last few months, the interest surrounding cryptocurrency derivatives products has been growing fast. For some time now, open interest in CME’s bitcoin futures has been breaking records. Bakkt’s futures platform began testing contracts on Monday and the company says there are participants from all around the world. Elsewhere, bitcoin derivatives provider Ledgerx is listing a huge $100K call option with a December 2020 expiry.

Also read: Honestnode Founder Discusses the First Stablecoin Built on Bitcoin Cash

Bakkt Begins Testing Its Daily and Monthly Physically-Settled Bitcoin Futures

On July 22, the Intercontinental Exchange’s (ICE) long-awaited cryptocurrency futures trading subsidiary Bakkt began testing its futures contracts. “Today kicks off user acceptance testing ICE markets for the Bakkt Bitcoin daily and monthly futures contracts. Testing is proceeding as planned with participants from around the world,” Bakkt tweeted on Monday. The parent company of the New York Stock Exchange, ICE announced the BTC futures offering about a year ago, but Bakkt’s physically-settled bitcoin futures was delayed. In order to provide the new derivatives products, Bakkt partnered with the ICE futures exchange so the service can provide clearing infrastructure for physical delivered bitcoin futures contracts to market participants. “Participants will undergo applicable AML/KYC reviews, consistent with CFTC-regulated markets and connect via ICE’s existing infrastructure,” Bakkt’s website explains.

According to Bakkt’s blog, the company is testing two different kinds of products traded at ICE Futures U.S. and cleared at ICE Clear US. Former Coinbase executive and Bakkt COO, Adam White, said the launch will usher in a new standard for accessing cryptocurrency markets. “Compared to other markets, institutional participation in crypto remains constrained due to limitations like market infrastructure and regulatory certainty — This results in lower trading volumes, liquidity, and price transparency than more established markets like ICE’s Brent Crude futures contract, which has earned global trust in setting the world’s price of crude oil,” White opined. The Bakkt executive added:

Bakkt’s efforts to help institutions launch safely into this market is the right stuff for the future.

Other firms like Erisx and Ledgerx are also planning to offer physically-settled bitcoin futures contracts. On June 25, news.Bitcoin.com reported on Ledgerx’s designated contract market (DCM) license approval by the U.S. Commodity Futures Trading Commission (CFTC) to offer these products to institutional and retail investors.

The Centurion Contract: A $100K BTC Call Option

The U.S.-based crypto derivatives and clearing platform Ledgerx announced on July 17 that current investors can purchase a $100K call option called the “Centurion Contract” with a December 2020 expiry. Essentially this means that the price has to be $100,000 per BTC by 2020 and the market capitalization of BTC would be over 2 trillion dollars. “How much would you pay today for the right to buy one bitcoin for $100,000 in December 2020?” Ledgerx tweeted. “$100K option now available to Ledgerx customers, coming to all investors soon,” the company teased.

“Dozens and dozens of institutions got back to us saying we’d be interested in trading a contract like this,” Chief Executive Officer Paul Chou told the press. “I understand $100,000 is a large number, but a lot of us who’ve been in this space remember Bitcoin at $1, and then it hit $10 and $100 and $10,000. A $100,000 contract doesn’t even make us blink.”

Excited to share that @ledgerX completed the first SOC 1 Type 2 audit for a bitcoin company, and received unqualified opinion. Audit conducted by @friedmanllp.

— LedgerX (@ledgerx) July 19, 2019

Following May’s Records, CME Group’s Bitcoin Futures Touch All-Time Highs in June

During the first week of June, news.Bitcoin.com briefed our readers on the Chicago Mercantile Exchange (CME Group) seeing a massive amount of interest for its bitcoin futures in May. For instance, the exchange posted 33,000 contracts ($1.3 billion notional value) on May 13. After that record day, CME’s open interest for its bitcoin derivatives positions saw an all-time high of approximately 5,190 contracts the following week. The rise in interest in CME’s bitcoin products had continued to grow larger in June.

“CME Bitcoin futures reached a record $1.7B in notional value traded on June 26, surpassing the previous record by more than 30% — The surge in volume also set a new open interest record of 6,069 contracts as institutional interest continues to build,” CME Group stated.

CME Group has reaped the benefits of more investors when the Chicago Board Options Exchange (Cboe) announced it was ending its bitcoin futures products back in March. Being one of the largest derivatives marketplaces worldwide, CME Group followed Cboe’s trail after the company launched its futures products in December 2017. For a while, Cboe smashed records and led the race between the two global market companies. Many spectators have assumed that the latest bullish prices have been due to professional traders and larger financial institutions who want to get in on these types of markets, even with the large price fluctuations.

Overall, people think that large institutions gearing up to offer cryptocurrency derivatives and other types of crypto products will continue to entice institutional investors who would rather use traditional investing terminals. Two weeks ago, Fidelity International launched a cryptocurrency trading simulator, and according to reports a few days ago, the company has also filed an application to be a New York Trust. Prior to launch, Bakkt will have to obtain approval from the New York Department of Financial Services (NYDFS) as well. The company Seed CX revealed two of its subsidiaries, Seed Digital Commodities Market and Zero Hash, were granted the 20th and 21st Virtual Currency License approvals from the NYDFS. When the company announced the approvals, Seed CX disclosed it also has plans to offer a market for CFTC-regulated digital asset derivatives products.

What do you think about the recent interest in cryptocurrency derivatives products? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Pixabay, CME Group, Twitter, and Bakkt.

Do you want to keep an eye on moving cryptocurrency prices? Visit our Bitcoin Markets tool to get real-time price updates, and head over to our Blockchain Explorer tool to view all previous BCH and BTC transactions.

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Competing Stablecoins Can’t Topple Tether

06/07/2019 by Idelto Editor

Love, hate or fear it, there’s no avoiding tether (USDT). Its shadow looms over the cryptoconomy, supplying sanctuary in times of volatility, providing fiat capital inflow and acting as a lightning rod for crypto critics who believe it’s propping up the price of bitcoin. Over the past year, a flurry of new stablecoins have entered the market, each vying to topple tether and provide a more transparent and fully audited alternative. So far, they have scarcely made a dent in tether’s dominance.

Also read: Bitcoin Cash ETP Lists on Leading Swiss Stock Exchange

Despite a String of Contenders, Stablecoins Can’t Topple Tether

Stablecoins have attracted less attention this year because revitalized crypto markets have given traders less cause to rely on them. Last year, everyone was issuing new stablecoins, but that trend has slowed to a trickle. On July 3, a new stablecoin did enter the fray, although this one has no designs on displacing tether. Pink Care Token (PCAT) is a stablecoin issued as part of a Binance-fronted initiative to supply feminine hygiene products to Ugandan women.

From an altruistic perspective, the project, which has the support of 46 crypto companies, seems well-intentioned and is indicative of how far stablecoins, and the cryptocurrency industry in general, have come. The same properties that enable donors to track the funds contributed to Binance’s charitable initiative are used to monitor the movements of stablecoins throughout the crypto ecosystem and they paint a picture of a market that’s heavily skewed in tether’s favor.

Even when the cryptosphere is comparatively calm, stablecoins capture a huge chunk of trading volume. Or rather tether does. The rest barely register. Despite being the eighth largest crypto asset by market cap, tether accounts for the second highest trading volume after BTC, with $35B swapped per day on average. The next closest competitor, USDC, captures just one tenth of USDT’s volume.

The Rise and Fall of the Gemini Dollar

One of the most curious casualties in the stablecoin wars has been the Gemini dollar (GUSD). At its peak, the fiat-backed stablecoin’s market cap stood at $103M, but today that has dropped to just $12.5M. Other leading stablecoins have followed a similar trend, with the total number of circulating tokens for paxos, stably and USDC all diminishing this year. The only leading stablecoin to have increased its market cap is tether, which now stands at close to $4B.

Twitter account @usdcoinprinter tracks the issuance of stablecoins, but so far there’s only one token being minted, and what’s more it’s being minted en masse. To place this in context, tether frequently issues 10X the entire market capitalization of its closest competitor in one swoop. USDT is to stablecoins what BTC is to altcoins, but whereas bitcoin’s dominance stands at 62%, tether is capturing 98% of all stablecoin volume. Traders have perfectly viable USDT alternatives, but so far they have yet to see the wisdom or the need to switch. With the vast majority of all stablecoins never leaving the exchanges they’re traded on, it makes little difference to investors what denominated dollar-pegged token they’re using. Tether works – for now, anyway.

🎾 TETHER PRINTER 🎾
Just printed $100,000,000 USDT!

Total Supply: $4,020,057,493

— Stablecoin Printer (@usdcoinprinter) July 4, 2019

The Interminable Tether Debate

Whether you believe tether is propping up bitcoin’s latest rally depends on who you speak to. Some commenters, such as David Gerard, who believes the entire cryptosphere is a giant scam yet can’t resist reporting on anything else, see manipulation. Other discredited critics such as Nouriel Roubini agree. On the other side of the divide, there are more sanguine voices, such as Kraken’s Jesse Powell, who does not ascribe to this theory.

“I don’t have inside knowledge of what’s happening at Tether, but I can tell you that, historically, when you’ve seen growth in the supply of Tether, we’ve seen growth in the supply of U.S. dollars coming onto Kraken. And other exchanges would report the same,” he noted.

In other words, correlation does not equal causation. “There are days when you see the price going up ten percent a day. You can bet all the exchanges are onboarding fifty to a hundred thousand new users a day. That is what is driving up the price. It’s huge retail demand and all the media attention on it. It’s not Tether,” insisted the Kraken CEO.

Crypto Assets Backed by Belief

A series of global socio-economic events can be attributed to heightening interest in bitcoin, including escalating trade wars and economic sanctions. Demand for bitcoin in Iran has increased as the U.S. has sought to cut off capital inflows through tightening sanctions. Meanwhile, capital controls in China make it hard for the wealthy to get their money out of the country, with bitcoin one of the few ways in which this can be effectively done. Meanwhile, in the U.S. there’s been a kickback against the super rich, with populist politicians on the left advocating high taxes on the wealthy. Bitcoin is a haven for people who believe they risk having their net worth drastically slashed by punitive taxation.

One thing everyone seems to agree on is that bitcoin’s latest price rally hasn’t been retail driven: Google Trends data shows that interest in buying bitcoin remains low, adding weight to the notion that larger forces are at play, and that global macro trends are driving the action rather than retail FOMO. In other words, tether may have very little to do with it.

Regardless of what’s propping up the cryptoconomy at present, all assets, from bitcoin to the U.S. dollar, are backed by collective belief. For so long as people believe 1 USDT is worth 1 USD, and that 1 USD has an agreed measure of purchasing power, tether will maintain its peg and its near total dominance of the stablecoin market.

Do you think tether is responsible for bitcoin’s price rise? Let us know in the comments section below.

Images courtesy of Shutterstock and Coincodex.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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