What’s the most popular crypto? – Moonhub
TL;DR USDT is still way too popular, and it dwarfs fiat trading.
Bitcoin is big, bitcoin is beautiful. More people hold bitcoin than any other crypto. More people know about it. But do you know what they don’t do with it?
Use it. At least, not as much as Tether.
A recent article by Bloomberg highlighted the issue, which can plainly be seen on CoinMarketCap. Daily volumes for USDT are higher than those for BTC. Today, for example, USDT shows around $15 billion of volume, while BTC shows $12.5 billion.
Now, you have to bear in mind that the use cases for bitcoin and Tether are somewhat different. Bitcoin is a holder’s coin: it’s a store of value and people buy it predominantly as a form of investment (or speculation). But USDT is used for trading. No one uses it as an investment — it’s backed by dollars, and they’re not going up in value. It’s a short-term store of value at best. Due to the various risks and restrictions of holding it, let alone cashing it out for real money, it’s generally not considered to be a viable alternative to holding real dollars.
Yes, people also buy bitcoin to trade against alts. But right now, the alts market is severely depressed. In fact, it’s practically on life support. There’s not much in the way of volumes for alts, whether against USDT or BTC. That market is in cryogenic stasis. Bitcoin, meanwhile, is having a great time. And traders like to use USDT as an alternative to the frictions of actual fiat.
You might have noticed something important. Every time bitcoin BTC against USDT, that’s volume for both. They zero each other out.
So what’s the real story here?
Bitcoin has pitifully low volumes against fiat. The major exchanges like Coinbase and Bitstamp are just doing a few tens of millions of dollars a day against USD. Most of the action happens against USDT. That means the majority of action for BTC is in a currency that won’t ever be withdrawn.
And USDT still dwarfs the alternative stable coins. For all its opacity, the lack of audits, the shadiness — it’s still the king of fiat proxies. Thanks to the legal action against the company last year, we can be fairly sure it truly is backed by actual dollars. But as far as compliance goes, they’re a train wreck. But people in the crypto world just don’t care. USDT has established network effect and volume, just like bitcoin, and that’s worth a lot.
Article by Moonhub
Published at Thu, 03 Oct 2019 17:01:08 +0000
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