Stable coin has entered the market one after another, will USDT laugh last to the end?
In the absence of competitors between 2017 and 2018, USDT has occupied more than 90% of the stable currency market for a long time. Driven by the unclear regulatory attitudes of some local governments and the tightening of some OTC, USDT achieved nearly 300 times market value growth in less than two years, and the influence can shake the entire cryptocurrency market.
Tether (USDT) once stood on the top of the mountain and said proudly, “Look, this is all the land I have laid, and no one is robbing me.” However, in 2018, the soldiers were in a state of chaos, stablecoins and platform coins. They not only occupied the territory of the USDT, but also slowly took away the “followers” of the USDT. The rumors put USDT in the spotlight.
It is undeniable that the market value of USDT has fallen sharply in the past year. At the beginning of 2018, USDT controlled the entire stablecoin market. With the sudden emergence of other stablecoin, market share of USDT was gradually swallowed up, and there was a sharp drop at the end of November.
According to relevant data, USDT still dominates the market, but its 100% market share has dropped about 75%, followed USDC supported by Circle and Coinbase, which controls about 9% of the market, and again TrueUSD (TUSD) at 7%, Paxos Standard (PAX) at 4%, DAI at 3%, Gemini Dollar (GUSD) at 1%.
The USDC was the best performer to seize market share in the war, as Coinbase launched the USDC in December last year, USDC occupied 13% of the stablecoin market within three month.
Reddit users said that the reason why USDC has made a good result in the stablecoin market is that Coinbase has made USDC the only way to convert cryptocurrencies into fiat without Coinbase Pro fees, which has brought great power to USDC, I might use USDC for this reason.
OKEx, IBM, Facebook will also enter the stablecoin market,thus USDT may be more difficult to go after those entrance. Tether’s transparency issue has been the subject of market controversy. The market is mainly concerned about whether it has enough US dollar reserves to support its $1.9 billion liquidity issue, and secondly to question Tether’s never-independent audit of its US dollar collateral.
Last year, negative news such as the bankruptcy of Tether’s custodian bank caused the USDT, which was once 1:1 in the US dollar, to fall from US$1 to US$0.89. After an unprecedented “digital dollar plunging”, the market’s confidence in USDT was greatly affected. Recently, Tether’s reserve assets have changed from 100% of the US dollar to “a basket of assets”, including cash equivalents and other assets, which have once again caused controversy. The market is worried about the adequacy and risk of its reserve assets.
The rise of other stablecoins highlights the shortcomings of UDST. As a medium of exchange for cryptocurrency, stablecoin can be roughly classified into legal currency mortgage type, digital asset mortgage type, and unsecured algorithm bank type. In addition, the stablecoin based on legal tender is playing a certain role in storage and risk avoidance, its main function is to provide investors with an interface to the world of legal currency.
The highly centralized management and opaque USDT has been questioned about whether it can be effectively exchanged with the US dollar 1:1. Recently, Tether’s official website changed the reserve asset structure and Bitfinex had difficulty in accessing USDT and USD.
The market is accused of insufficient stocks of its dollars. Although most of the stablecoins issued in the later period have introduced trust accounts and audit institutions to improve their transparency, their exchanges with fiat currencies remain flawed.
In addition, IEO remains hot at present, but stablecoins have not fallen. Firstly, international giants JP Morgan (JPMorgan Chase) and Facebook have announced the entry of stablecoin. Then, Xu Mingxing, the founder of OKC HOLDINGS CORPORATION, announced on Twitter that it would launch the stable currency OKUSD and said that “stablecoin will be one of the most important applications of the blockchain” on 19th March.
The layout of stablecoin giants has made the market share narrower and narrower after USDT. When the market size and scope of other stablecoins are sufficient to have a greater impact on the market, the stablecoin will be another story.
