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Is stablecoin a security? Crypto Investors get rid of stablecoins: USDT suffered the most

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stablecoin security

The market capitalization of the leading stablecoins has dropped significantly after the FTX crash. Let’s find out what this means for the market and whether it’s worth following the example of other investors and going into fiat. Is stablecoin a security?

The drama surrounding FTX seriously undermined investors’ confidence in centralized exchanges and forced them to get rid of stablecoins en masse. USDT suffered the most: according to CoinMarketCap, its supply has fallen from $67 billion to $65 billion in the last two weeks.

Because of concerns about Tether and stablecoin security reserves, users are redeeming USDT or converting it to USDC. A similar situation was observed after the collapse of Terra Luna – then within two weeks the market capitalization of the asset fell by $10 billion.

However, CTO Paolo Ardoino says that Tether was not affected by the FTX crash and users have nothing to worry about.

BUSD and DAI were also hit

USDT is not the only stable coin affected by the FTX story. For example, the circulating supply of BUSD fell from $23 billion to $22.5 billion, and DAI fell from $5.7 billion to $5.2 billion.

On the contrary, the capitalization of USDC and Pax Dollar steel blockers increased. Over the past two weeks, USDC’s supply reached $44.7 billion.

The cryptocommunity is actively discussing this on Twitter and speculating about the reasons for this growth. Some believe it may be due to USDC’s profitability and the influx of former USDT holders into the asset.

FTX collapse undermined investor confidence

The fall of the Sam Bankman-Fried empire has undermined user confidence in the cryptocurrency and led to a massive collapse in prices.

But market participants also fear that other platforms will follow FTX’s lead. So it’s no surprise that many retail investors are choosing to hold their own assets rather than hold them on centralized exchanges.

Previously, we reported that Poloniex curtailed support for stablecoins on the BNB Chain.

Cryptocurrency

Bitcoin Rebounds But Concerns Mount as Ethereum’s Perpetual Funding Turns Negative

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Over the past weekend, the crypto market experienced a tumultuous blend of emotions, characterized by fear and greed, as Bitcoin plunged to lows of 64,500. However, it swiftly rebounded, with the leading asset surging back above the 67,000 mark.

While Bitcoin has exhibited significant resilience, the same cannot be said for Ethereum.

Ethereum’s Rocky Road Amidst Bitcoin’s Resilience

The heavy selling of BTC put options indicated a dissipation of fear among investors, who seemed eager to capitalize on the dip.

Interestingly, amidst this sentiment shift, there’s a notable inclination towards greed, evidenced by the increasing interest in long-dated Sep and Dec BTC calls targeting lofty price levels of $100-150k. According to the latest analysis by QCP Capital, this optimism reflects a bullish outlook despite recent volatility.

The Singapore-based digital assets trading firm said Ethereum presents a contrasting narrative as concerns loom as perpetual funding rates turn negative and risk reversals portray a “downside skew,” signaling apprehension within the market about a potential downturn in the crypto asset’s price despite the continuing rally in alts.

Despite Ethereum reaching a peak of over $4,000, its highest value in two 3years, QCP previously observed a change in market sentiment, evident in the negative risk reversals. These reversals indicate the contrast in implied volatility between call and put options, a shift likely attributed to the decreased chances of a spot Ethereum ETF approval in the US in the near future.

Following the long-awaited Dencun upgrade, which QCP had anticipated, the crypto asset saw a decline to under $3,500 over the weekend amid a market-wide slump.

Is Ether Overvalued?

A different analysis by CryptoQuant revealed that ETH’s total supply is diminishing as a result of heightened network activity and the utilization of transaction fees for burning. The subsequent uptick in staking participation was also observed, with over 31 million ETH staked, indicating growing confidence in the asset’s long-term prospects.

Its network also witnessed a notable surge in activity, characterized by increased daily transaction volumes and ETH transfers. However, the current elevated MVRV Ratio implied that ETH might be overvalued.

“The current high MVRV Ratio suggests that ETH might be overvalued, which calls for a cautiously optimistic approach. Despite these challenges, the Dencun upgrade reinforces Ethereum’s strong fundamentals. Yet, the market’s recent preference for SOL over ETH signals that we might see some adjustments ahead.”

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Dogwifhat & Shiba Inu Lead Meme Coin Gainers on Monday as DOGE20 Raises $2M

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The crypto market is green today as a wave of speculative buying lifted meme coins to kick off the new week.

Leading the charge are dogwifhat (WIF) and Shiba Inu (SHIB), both of which have posted double-digit percentage gains.

However, many traders are already looking ahead to the next potential mover, with some speculating that the rapidly growing Dogecoin20 (DOGE20) project could be poised to follow in WIF and SHIB’s footsteps.

Meme Coin Demand Ramps Up as WIF Flips PEPE for #3 Spot

The quirky WIF token has surged over 30% in the past 24 hours, trading at $3.06.

This blistering rally has helped WIF’s market cap pass $3 billion – cementing it as the third-largest meme coin by valuation.

In the process, WIF has flipped the super-popular Pepe (PEPE) coin.

The token’s explosive move appears to be a culmination of hype and speculation over WIF’s long-term potential in the meme coin space.

After tagging an all-time high of $3.53 this past Friday, the token saw some expected profit-taking before landing support at the $2.05 level.

However, Sunday’s monster candle has obliterated the bears, leaving meme coin traders wondering how high dogwifhat could climb.

Fueling the bullish sentiment even further is the passionate community of WIF, who recently united to raise over $650,000 to have the token’s mascot showcased on the iconic Las Vegas Sphere.

This sort of widespread publicity stunt has only magnified the FOMO from traders looking to get involved in WIF’s rally.

Shiba Inu Mania Intensifies as SHIB Challenges DOGE’s Top Spot

Not to be outdone, Shiba Inu is also experiencing a bullish uptick, spiking over 14% to trade at $0.0000279.

The double-digit percentage rally has helped SHIB solidify its spot as the second-largest meme coin by market cap – and the largest by 24-hour trading volume.

According to data from CoinGecko, $2.2 billion worth of SHIB tokens changed hands over the past day alone.

This trading frenzy not only outpaced the volumes of DOGE and other top meme tokens, but it actually outpaced those of major altcoins like XRP (XRP) and Cardano (ADA) during the same timeframe.

The red-hot price action has reignited speculation that SHIB could soon dethrone Dogecoin (DOGE) as the largest meme coin globally.

With a market cap of around $16.4 billion, SHIB is now just $4 billion behind DOGE’s valuation.

If its momentum continues building, many analysts believe the so-called “Dogecoin killer” could finally complete its long-awaited flip.

Presale Sensation Dogecoin20 Aims to Follow in WIF & SHIB’s Footsteps

While WIF and SHIB have been the most talked about meme coins today, Dogecoin20 is another project that could be primed to explode onto the scene.

This up-and-coming crypto has quietly been gaining traction during its ongoing token presale, having already raised over $2 million from investors looking to get in early.

What makes Dogecoin20 particularly appealing to these investors is its blend of proven meme culture with innovative blockchain features.

On the culture side, DOGE20 pays homage to the OG Dogecoin through its clever branding and Shiba Inu imagery.

This built-in brand recognition could help it tap into the type of viral appeal that produced exponential returns for DOGE in 2021.

However, DOGE20 doesn’t stop at meme-fueled hype.

Instead, it layers on a staking protocol that allows DOGE20 holders to automatically earn passive rewards just for holding tokens in their wallets.

According to the project’s whitepaper, 15% of DOGE20’s 140 billion supply has been explicitly earmarked to incentivize investors seeking passive income through staking.

During its presale phase, DOGE20 can be purchased for just $0.000164 – but this price is only available for a limited time.

As more fundraising milestones are met, the DOGE20 price will rise, meaning those who invest the earliest will gain the most.

Once the presale wraps up, 10% of the DOGE20 supply will be shipped to Uniswap’s liquidity pools to ensure a smooth exchange debut.

With all the components for runaway success, some are speculating that Dogecoin20 could be the next meme coin to rise alongside dogwifhat and Shiba Inu.

Visit Dogecoin20 Presale

Disclaimer: The above article is sponsored content; it’s written by a third party. CryptoPotato doesn’t endorse or assume responsibility for the content, advertising, products, quality, accuracy, or other materials on this page. Nothing in it should be construed as financial advice. Readers are strongly advised to verify the information independently and carefully before engaging with any company or project mentioned and do their own research. Investing in cryptocurrencies carries a risk of capital loss, and readers are also advised to consult a professional before making any decisions that may or may not be based on the above-sponsored content.

Readers are also advised to read CryptoPotato’s full disclaimer.

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Cryptocurrency

Here’s the Number of ETH Holders in Profit as Price Dips 11%

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Ether (ETH) has lost more than 11% of its value in the past six days, falling from $4,000 to $3,500, but a vast majority of its holders are still in profit.

According to a tweet by crypto market intelligence platform IntoTheBlock, around 89% of ETH holding addresses are currently in the green.

89% of ETH Holders in Profit

Ether’s price began to slump on March 13 after the Dencun upgrade. Recall that the upgrade was launched to slash Ethereum-based layer-2 solutions’ transaction fees by 10x or more and improve the network’s scalability.

CryptoPotato reported that the Ethereum network’s activity and supply dynamics stayed positive during the first hours after the upgrade. The total supply of ETH continued to fall, the number of daily transactions rose to high levels, and more ETH was staked.

However, analysts’ warnings of a price correction manifested within 24 hours. Ether left the $4,000 zone and fell to less than $3,700.

With 89% of ETH holders still in profit despite the price decline, IntoTheBlock discovered that the biggest potential on-chain sell volume is at $3,700, where more than 991,000 addresses acquired 4.35 million ETH.

ETH Price Outlook

If ETH rebounds from its current trading range of $3,500, the asset could soar past $4,000 to record a new high in the coming weeks but a further plunge could lead the asset below $3,000. Analysts believe ETH could find support around the $3,500 region and initiate a fresh rally. However, a continued decline in its price could push its support level to the $3,181 and $2,966 levels.

Whether ETH rallies in the short term or not, one major factor that could propel a surge in the coming weeks is the approval of spot Ethereum exchange-traded funds (ETFs) from the United States Securities and Exchange Commission (SEC). The agency has delayed its decision on several applications for the products until May 23.

Interestingly, asset manager VanEck believes spot Ethereum ETFs could become bigger than their Bitcoin counterparts if the SEC eventually greenlights their launch. The firm said Ethereum ETFs could attract more demand because they have a market size as big as Bitcoin ETFs.

Meanwhile, Standard Chartered Bank recently predicted that ETH could be worth $8,000 by the end of 2024 and $14,000 by 2025.

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