Research: TRON and gold-backed stablecoins poised for growth as Ethereum activity shrinks
After Terra UST de-pegged in May 2021, which raised concerns about the safety of stablecoins, crypto proponents began phasing out algorithmic and fiat-backed stablecoins. I pointed out the fundamental difference and speculated that the latter would be more resilient.
However, that claim was recently tested at two different events. In March, USDC lifted the peg from the dollar price, dropping to $0.8218 as parent company Circle was revealed to have $3.3 billion in deposits in bankrupt Silicon Valley Bank (SVB). .
Similarly, the New York Department of Financial Services (NYDFS) ordered Paxos in February to stop issuing the dollar-backed BUSD stablecoin as it investigates allegations of securities breaches. Since then, BUSD’s market cap valuation has plummeted.
Glassnode data analyzed by crypto slate Revealing a downward trend in stablecoin activity on Ethereum, we offer a glimpse of how Tron may emerge as a winner in this changing landscape.
Additionally, it appears that a new story is emerging for gold-backed stablecoins.
Ethereum plummeting stablecoin active addresses
An address is considered active when it participates in a transaction as a sender or recipient of funds. The number of active addresses is a measure of usage and an indicator of the popularity of a particular cryptocurrency.
The chart below shows active addresses for USDT, USDC, BUSD, and DAI operating on the Ethereum blockchain. All four companies have recorded sharp declines in recent weeks.
Since 2018, stablecoin market leader Tether (USDT) has continued to rise, peaking at 150,000 in June 2020. The subsequent downtrend saw him bottom out at 40,000 by July 2022. Year.
Since then, USDT active addresses on Ethereum have been declining, and the trend has accelerated since February. There are currently 69,225 active addresses.
Analysis of USDC Active Addresses shows a general upward trend since September 2020, peaking around March at 60,000. However, a significant decline continued, and the number of active addresses now stands at 25,700.
Active address data for DAI and BUSD are nearly imperceptible even with the same scaling. However, the DAI started declining around March, currently leading to 2,700 active addresses. Similarly, BUSD active addresses decreased to 857.
Transfer volume refers to the amount of cryptocurrency that moves from one address to another. Like Active Addresses, Transfer Volume can measure usage and popularity.
Total stablecoin transfers on Ethereum have fallen to the last low seen in January 2021. The perceived narrative that all stablecoins are like Terra UST.
On the Ethereum blockchain, USDC currently has a transfer volume of 7.033 billion, while USDT has 3.858 billion.
Concerns about the safety and security of USDC and BUSD have caused USDT’s market cap to rise. This indicates that the market considers USDT to be more trustworthy than the other two despite the ongoing redemption dispute.
USDT is available on Standard Ledger Protocol for Algorand, Avalanche, Ethereum, EOS, Liquid Network, Near, Omni, Polygon, Solana, Bitcoin Cash, Statemine, Statemint, Tezos, and Tron blockchains.
The chart below shows that USDT supply on TRON has surpassed Ethereum since August 2022. This means that users prefer to use his TRON to trade in his USDT over his Ethereum.
Gold prices fell below $2,000/oz on 20th March in the current macroeconomic conditions. This is below his all-time high of $2,070/oz, but analysts predict a further surge is coming, with a shift to “real assets” rather than “fake money”.
A gold-backed stablecoin, which is pegged to the price of gold, has the potential to do both in terms of preserving the tradability and portability of a crypto backed by a physical commodity with thousands of years of history. Provides advantages.
two most popular Gold stablecoins by market cap are Paxos Gold (PAXG) and Tether Gold (XAUT).
The chart below shows the combined volume of PAXG and XAUT on a 7-day moving average. The PAXG pattern is positively correlated with the price of gold reaching ATH in March 2022, corresponding to a spike in his PAXG total volume around the same time.
These days, XAUT is the more dominant of the two in terms of Exchange volumes.
As gold continues to gain momentum, so will the popularity of gold-backed stablecoins.
Post Research: Tron and gold-backed stablecoins poised to grow as Ethereum activity dwindles, first appearing on CryptoSlate.