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Bitcoin [BTC] dominated by stablecoins with regards to market opportunity: Satoshi Capital research




Bitcoin [BTC] dominated by stablecoins with regards to market opportunity: Satoshi Capital research
Source: Pixabay

Stablecoins come into the picture at a time when the massive fluctuation of digital assets impedes their application. A recent report called ‘Stablecoins: The new bank account’ has revealed an optimistic time ahead for these stablecoins. The digital coins pegged with fiat or gold have contributed to the disruption of traditional payment space.

Satoshi Capital Research on its Twitter handle posted:

“[New Research] — Stablecoins: The New Bank Account

Stablecoins are digital tokens that represent national currencies and are issued using a variety of bitcoin-based technologies, representing an $18 trillion market opportunity.”

The research suggests that the total market opportunity for stablecoins exceeds $18 trillion while that of Bitcoin [BTC] stands at somewhere around 15 trillion. The colossal difference between stablecoin and conventional banking institutions is that it provides a payment processing channel that is time and cost efficient.

A significant edge that pegged currencies have over traditional banking accounts is that anyone can access and transfer funds in real time with no transactional fee involved.

The processing fee and time in terms of stablecoin is nil. On the other hand, the processing time for US domestic transfers takes around 24 hours at a fee of $20 per transaction and cross-border payment accounts for a processing time of 48 hours at a fee of $40 per transaction.

Tether [USDT] has been the stablecoin that has been around for the longest time, since its inception in 2014, and it continues to dwarf the newer stablecoins in the market. The research exhibited the numbers which backed Tether’s dominance over recent players [like TrueUSD, Paxos Standard Token, Gemini Token, among others] in the space.

The entire stablecoin space’s valuation despite the entry of new players in 2018 stood at more than $700 million while the traded volume totaled at more than $11.5 billion.

Tether [USDT] had an issued value of $2,036 million. The cumulative daily trading volume of the oldest stablecoin had been registered at $ 2,950 million and the trading volume for the year 2018 totaled at $1,080 billion.

The report also mentioned a whopping a $600 trillion transfer volume of stablecoins in 2018 via Domestic bank transfer, out of which Tether [USDT] scooped a significant $109 billion volume, a 624% increase in its share from its $15 billion volume the year before.

Stating that this breed of digital asset is efficient as a parallel currency mainly due to its digital nature, the report asserted:

“To people operating within parallel currency economies today, such as Venezuela, stablecoins offer meaningful competition to traditional bank accounts as there are no limitations on currency denominations or transfer amounts and frequency.”

Despite being a critical contender, stablecoins have a long way to go with respect to its offerings to compete with traditional banking establishments in a mainstream scenario.

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Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021





Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”

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