USDT beats XRP in market capitalization, and why bitcoin becomes digital gold

Bloomberg: Bitcoin is maturing toward digital gold

Analysts at Bloomberg pointed out the reasons why Bitcoin is maturing from an unstable asset into a digital version of gold.

The first factor is the decrease in volatility. On an annual scale, fluctuations in the cryptocurrency rate are decreasing while BTC has fallen in price by 5% since the beginning of 2020, the S&P 500 index has dropped by 22%. The second reason, according to the analysts, is an increase in trading volumes of futures, which reduces the speculative component of the cryptocurrency bitcoin price.

Moreover, Bitcoin quickly regains its position — after the March collapse by 45%, the price has returned to its previous level in less than a month.

“An increasing futures open interest, declining volatility and relative outperformance despite the stock-market shakeout indicates Bitcoin is maturing from a speculative crypto asset toward a digital version of gold,” analysts conclude.

USDT beats XRP in market capitalization

Tether stablecoin entered the top three cryptocurrencies in terms of market capitalization, moving the Ripple token to fourth place. According to Messari, the total value of USDT today is $7.484 billion, and XRP amounts to $5.576 billion.

Ripple has long occupied the third position, however, in recent months, Tether periodically released new coins to the market, which allowed to bypass XRP.

In addition, the Ripple price has been in a downtrend since the beginning of 2018 — when the coin set a price record at $3.84, and is now trading near the $0.18 level. The value of the USDT tied to USD has fluctuated in a narrow range of $0.96–1.05 for the last two years.

Research: the issue of stablecoins does not affect the price of bitcoin

Specialists from the Center for Economic Policy Research analyzed the issuing of USDT and other stable coins over the past three years. Contrary to popular belief, it turned out that it does not affect the course of bitcoin.

“We find no systematic evidence of stable coin issuance driving cryptocurrency prices.” the analysts conclude.

They also came to the conclusion that investors prefer to transfer funds to stablecoins during periods of increased volatility of other cryptocurrencies — at these moments the price of stable coins slightly rises. For example, in January and February of this year, USDT was trading at $1.05, when bitcoin showed a decrease in value.

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