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There is enough room on the market for a few stablecoins. Are stablecoins a good investment?

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are stablecoins a good investment

Analyst company Nansen published a study that looked at the onchain performance of the leading stablecoins over the past 2 years. Are stablecoins a good investment?

The study focused on four major stablecoins – USDT, USDC, BUSD, and DAI. All of them are popular among participants in the cryptocurrency community and actively compete for market share.

How many stablecoins are there – USDT leads by capitalization and transaction volume

The leader among stablecoins regarding total market capitalization has been USDT for a long time. But if you consider its capitalization on the Ethereum blockchain, the situation does not look so clear-cut. Tether dominated its segment until mid-January 2022, and then gave way to USDC due to growing panic, or FUD, and suspicions about the company’s opaque activity.

The percentage of USDT supply on the centralized exchanges fell 12% from its peak in August 2022. This is due to the collapse of FTX, which led to a huge outflow of funds from crypto platforms. The number of USDT on decentralized platforms and in stacking pools has also declined.

USDT has the highest number of unique addresses and has a high transaction volume. This proves that in 2022, retail investors chose it more often than other stable coins.

USDC is trusted by more and more market participants

The number of USDC on all categories of platforms has begun to decline. CEX has the most tokens – more than 11% of the total supply -. Five of the top 10 USDC wallets are also linked to exchanges.

The number of unique USDC addresses continues to grow, even despite a slight decline in the stablecoin’s market capitalization over the past couple of months. This indicates a rise in user interest in the asset.

BUSD is barely used outside Binance

Although BUSD is one of the largest stablecoins, it is rarely used outside Binance. Almost 92% of the steiblocoin’s supply is on centralized exchanges, and almost all of it comes from the crypto-industry leader.

BUSD has the fewest unique addresses, and the largest wallets belong to Binance and Paxos. All of this speaks to the lack of widespread adoption of Stablecoin, despite its large market capitalization.

On February 13, the SEC announced its intention to sue Paxos, causing the company to suspend the mining of new BUSD tokens. Since then, the asset’s market capitalization has fallen from $16.1 billion to $14.2 billion.

DEX users prefer DAI

Despite its smallest market capitalization, DAI significantly outperforms other stablecoins regarding onchaintransactions. Decentralized platforms account for 17% of the asset’s supply – three times more than its closest competitor, USDC.

The list of DAI holders is the most diversified of all. It includes DEX, several liquidity pools, bridges, and even treasuries. The number of DAI transactions for 2002 was 3.6 million and the total amount was over $1.2 trillion. The number of unique addresses of token holders is at a record high of 486,000.

To summarize

Despite a slowdown and, in some cases, a decline in market capitalization, mass acceptance of Stablecoin continues to grow. And while the battle between the issuers of the leading stablecoins will continue, there is definitely room in the market for the coexistence of several stablecoins with different operating mechanisms.

We previously reported that bitcoin (BTC) formed a weekly bullish takeover candle and is targeting a bitcoin rate of $25,000.


Cryptotraders lost more than $250,000,000 in liquidations after Fed rate hike

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Crypto traders lost

Cryptotraders had a tough day: almost 68,000 positions were liquidated on exchanges in the last 24 hours, and the total volume of liquidations exceeded $257,000,000. All this happened against the news of the US Federal Reserve’s rate hike and another Securities and Exchange Commission regulatory action against cryptocurrencies.

Cryptotraders lost $132,000,000 in BTC

Bitcoin, Ethereum, and Ripple were the leaders in the number of forcibly closed positions. BTC liquidations totaled almost $132,000,000; Ethereum traders lost $51,000,000. XRP positions accounted for about $8,000,000 of liquidations. Bitmex exchange executed the largest order of $7.39,000,000.

Cryptocurrency market capitalization has declined 2% in the last 24 hours, but is still above the $1 trillion mark.

The weekly CoinShares report also recorded a massive outflow of funds for six consecutive weeks. During that period, nearly $500,000,000 was withdrawn from cryptocurrency platforms, with $113,000,000 coming from bitcoin. Analysts at the company believe the outflow is due to liquidity needs during the banking crisis rather than a negative outlook. The company mentions that a similar scenario was seen in March 2020 amid a COVID-19-induced panic.

Regulators continue to hunt the cryptobusiness

Another reason for the increased volatility in the market has been harsh action from U.S. regulators. Last night it became known that the U.S. Securities and Exchange Commission sued cryptomagnate Justin Sun, accusing him of fraud and market manipulation.

The SEC also issued a notice of wrongdoing against Coinbase, the largest U.S. cryptocurrency exchange. The securities regulator sued Coinbase Global Inc, for some of the products it offers.

We previously reported that Bitcoin (BTC) tests $28,000, but onchain metrics urge caution.

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Binance was caught circumventing KYC to register Chinese clients

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Binance China customer registrations

Employees of the cryptocurrency exchange Binance help clients from China to bypass compliance and verification. CNBC writes about it, citing hundreds of corporate emails from exchange employees on Discord and Telegram. It is reported that Binance has helped over 200,000 users register, bypassing its own security system. One case describes correspondence between a user from China and a Binance employee.

The employee under the pseudonym yaya.z suggested the user from China turn on a VPN, register as a Taiwanese resident and then return the location to China. Binance employees also advise customers not to use VPN services from the U.S., Hong Kong and Singapore, because the exchange does not provide services in those regions, writes CNBC. At the same time, Binance freely processes applications from U.S. email providers like Gmail or Outlook for registration.

The exchange even offers specialized mobile applications for customers from China. A CNBC reporter could download a special mobile application from Binance via email. At the same time, no VPN was needed to download the app, as the download was conducted through the domain of binance[.]com. It is also alleged that the exchange still verifies users with Chinese phone numbers.

An exchange spokesperson denied the existence of a special Chinese version of the mobile application. The exchange also added that it has improved the system to identify users from banned regions. CNBC notes that after providing evidence, Binance removed employee messages from corporate chats to circumvent KYC.

We previously reported that the Ethereum (ETH) price crossed the $1,800 mark, opening the way to $2,000.

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Why cryptoanalysts expect bitcoin to fall

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cryptoanalysts expect bitcoin to fall

The market remains in a bearish trend and bitcoin (BTC) will resume its fall and test $16,000. There are two reasons:

  • Altcoins are near serious resistance;

  • The BUSD and USDC stablecoins are manipulating the market.

The first statement can be confirmed or disproved by a technical analysis of the cryptocurrency market, but there is not enough additional information for the second.

The market capitalization of altcoins (ALTCAP) does hold nearly $605 billion of resistance. Although ALTCAP has risen above it several times, it didn’t develop above this area.

However, the daily RSI has broken through the bearish divergence trendline (green line). Such a breakout often precedes significant reversals into a bullish trendline. As a result, ALTCAP will move higher towards the $680B resistance area. If not, ALTCAP could fall back to the $518B support area.

There are also those who argue that bitcoin will test the $10000-$11000 area because there is a CME price gap that needs to be filled. The gap refers to the difference between the closing price of bitcoin futures on the Chicago Mercantile Exchange (CME) on Friday and the opening price on the following Monday.

We previously reported that Hong Kong has allocated another $50,000,000 to the crypto industry.

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