Crypto Update: Stable coins in a falling market
Cryptocurrency analyst, Saxo Bank Group
Winklevoss launch USD-backed stable coin
Over the past week two US-based firms, Paxos and Gemini Trust Co., announced the introduction of a USD-backed stable coin. The PAX and the GUSD are both fully compliant with the necessary US laws and are fully audited to insure each token is backed 1:1 by US dollars. These coins will compete with the largest stable coin Tether, which has seen its fair share of controversy. The announcement of a fully compliant stable coin is a step towards legitimising cryptocurrencies. The real test will be to see the volume of each and whether they can top Tether’s $2.5bn in daily volume. However, both regulated and unregulated stable coins poise distinct risks to the cryptocurrency market.
ICOs not to blame for ETH selloff?
A recent study dives into the ETH treasuries of ICOs to determine burn rate and runway for the projects. The narrative in the industry has been that ICOs have been putting excessive selling pressure on ETH. They argue that these projects have plenty of runway and are minor compared to the $46 million in cryptocurrency selling that exchanges and miners do on a daily basis. However, the facts do not matter when the narrative that ICOs are selling massive amounts of ETH is weighing on projects and investors.
Coinbase joins ETF race
Coinbase recently spoke with BlackRock for help in launching a cryptocurrency ETF. However, BlackRock mentioned earlier this year that it had no interest in launching a fund as clients were not interested. A Coinbase ETF is speculated to track multiple cryptocurrencies under a single note. This could provide a retail investor the equivalent of Coinbase’s index fund launched in March. If launched, this passive vehicle would open the door to more capital to other cryptocurrencies outside of Bitcoin and Ethereum.
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