Tether and USDC Hit Milestones as Stablecoin Growth Continues
Bloomberg
(Bloomberg) – One pillar of this year’s blistering commodities rally – Chinese demand – may be teetering.Beijing aced its economic recovery from the pandemic largely via an expansion in credit and a state-aided construction boom that sucked in raw materials from across the planet. Already the world’s biggest consumer, China spent $150 billion on crude oil, iron ore and copper ore alone in the first four months of 2021. Resurgent demand and rising prices mean that’s $36 billion more than the same period last year.With global commodities rising to record highs, Chinese government officials are trying to temper prices and reduce some of the speculative froth that’s driven markets. Wary of inflating asset bubbles, the People’s Bank of China has also been restricting the flow of money to the economy since last year, albeit gradually to avoid derailing growth. At the same time, funding for infrastructure projects has shown signs of slowing.Economic data for April suggest that both China’s economic expansion and its credit impulse – new credit as a percentage of GDP – may already have crested, putting the rally on a precarious footing. The most obvious impact of China’s deleveraging would fall on those metals keyed to real estate and infrastructure spending, from copper and aluminum, to steel and its main ingredient, iron ore.“Credit is a major driver for commodity prices, and we reckon prices peak when credit peaks,” said Alison Li, co-head of base metals research at Mysteel in Shanghai. “That refers to global credit, but Chinese credit accounts for a big part of it, especially when it comes to infrastructure and property investment.”But the impact of China’s credit pullback could ripple far and wide, threatening the rally in global oil prices and even China’s crop markets. And while tighter money supply hasn’t stopped many metals hitting eye-popping levels in recent weeks, some, like copper, are already seeing consumers shying away from higher prices.“The slowdown in credit will have a negative impact on China’s demand for commodities,” said Hao Zhou, senior emerging markets economist at Commerzbank AG. “So far, property and infrastructure investments haven’t shown an obvious deceleration. But they are likely to trend lower in the second half of this year.”A lag between the withdrawal of credit and stimulus from the economy and its impact on China’s raw material purchases may mean that markets haven’t yet peaked. However, its companies may eventually soften imports due to tighter credit conditions, which means the direction of the global commodity market will hinge on how much the recovery in economies including the U.S. and Europe can continue to drive prices higher.Some sectors have seen policy push an expansion in capacity, such as Beijing’s move to grow the country’s crude oil refining and copper smelting industries. Purchases of the materials needed for production in those sectors may continue to see gains although at a slower pace.One example of slowing purchases is likely to be in refined copper, said Mysteel’s Li. The premium paid for the metal at the port of Yangshan has already hit a four-year low in a sign of waning demand, and imports are likely to fall this year, she said.At the same time, the rally in copper prices probably still has a few months to run, according to a recent note from Citigroup Inc., citing the lag between peak credit and peak demand. From around $9,850 a ton now, the bank expects copper to reach $12,200 by September.It’s a dynamic that’s also playing out in ferrous metals markets.“We’re still at an early phase of tightening in terms of money reaching projects,” said Tomas Gutierrez, an analyst at Kallanish Commodities Ltd. “Iron ore demand reacts with a lag of several months to tightening. Steel demand is still around record highs on the back of the economic recovery and ongoing investments, but is likely to pull back slightly by the end of the year.”For agriculture, credit tightening may only affect China’s soaring crop imports around the margins, said Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant Co. Less cash in the system could soften domestic prices by curbing speculation, which may in turn reduce the small proportion of imports handled by private firms, he said.The wider trend is for China’s state-owned giants to keep importing grains to cover the nation’s domestic shortfall, to replenish state reserves and to meet trade deal obligations with the U.S.No DisasterMore broadly, Beijing’s policy tightening doesn’t spell disaster for commodities bulls. For one, the authorities are unlikely to accelerate deleveraging from this point, according the latest comments from the State Council, China’s cabinet.“Internal guidance from our macro department is that the country won’t tighten credit too much – they just won’t loosen further,” said Harry Jiang, head of trading and research at Yonggang Resouces, a commodity trader in Shanghai. “We don’t have many concerns over credit tightening.”And in any case, raw materials markets are no longer almost entirely in thrall to Chinese demand.“In the past, the inflection point of industrial metal prices often coincides with that of China’s credit cycle,” said Larry Hu, chief China economist at Macquarie Group Ltd. “But that doesn’t mean it will be like that this time too, because the U.S. has unleashed much larger stimulus than China, and its demand is very strong.”Hu also pointed to caution among China’s leaders, who probably don’t want to risk choking off their much-admired recovery by sharp swings in policy.“I expect China’s property investment will slow down, but not by too much,” he said. “Infrastructure investment hasn’t changed too much in the past few years, and won’t this year either.”Additionally, China has been pumping up consumer spending as a lever for growth, and isn’t as reliant on infrastructure and property investment as it used to be, said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong. The disruption to global commodities supply because of the pandemic is also a new factor that can support prices, he said.Other policy priorities, such as cutting steel production to make inroads on China’s climate pledges, or boosting the supply of energy products, whether domestically or via purchases from overseas, are other complicating factors when it comes to assessing import demand and prices for specific commodities, according to analysts.(Updates copper price in 11th paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Daily Cryptocurrency Exchange Trade Volume Taps All-Time High, Stablecoin Swaps Dominate – Markets and Prices Bitcoin News
Daily Cryptocurrency Exchange Trade Volume Taps All-Time High, Stablecoin Swaps Dominate
According to this week’s data, cryptocurrency trade volume touched an all-time high on May 20, reaching $1.76 trillion in reported 24-hour volume. Daily trade volume statistics for Monday have been high, as reported volume from crypto market aggregators shows over $300 billion in 24-hour volume. Meanwhile, stablecoins capture 50% of Monday’s global trade volume with tokens like tether, binance usd, and usd coin leading the pack.
Reported Crypto Exchange Volumes Worldwide Capture Lifetime Highs
Out of all the volume reported across the crypto economy’s lifetime, May 2021 saw the highest cryptocurrency trade volume in history. In fact, on May 20, the reported volume across hundreds of crypto exchanges shows an all-time high (ATH) of $1.76 trillion in daily volume. The reported volume for bitcoin (BTC) on Monday is around $71 billion in global swaps.
Statistics indicate that April saw a significant amount of trade volume as well, nearing a trillion when it tapped a 30-day high at $708 billion in daily swaps. The recently captured $1.76 trillion last Thursday, also took place when the entire crypto market capitalization dropped in fiat value from well over $2 trillion to $1.4 trillion.
Data from coincheckup.com’s global stats show that after May 19, 2021, nearly every day exceeds $1 trillion in worldwide swaps.
On Monday, stats from Coingecko show reported global trade volume is roughly $304.9 billion and an overall $1.6 trillion crypto-economy valuation. Coingecko’s data is roughly the same as coinmarketcap.com, which essentially shows what exchanges are reporting in real-time.
The $100 Billion Stablecoin Economy Commands More Than Half the Global Trade Volume
Coingecko’s fiat-pegged token index also shows the stablecoin market valuation increasing and at press time, it shows more than $202 billion in 24-hour global trade volume. If the reported numbers are precise, around 50% of the global trade volume on Monday is with stablecoins. It’s worth noting that reported trade volumes have been contested in the crypto economy for more than eight years.
While the U.S. dollar commands 17.9% of today’s BTC trades, cryptocompare data shows 55.28% of BTC’s market share volume is paired with tether (USDT). Tether and its stablecoin economy valued at $60 billion has settled much of the crypto trades on a daily basis during the last 30 days.
Paolo Ardoino, CTO at Tether Limited explained on Monday that the company has seen “enormous volatility in the crypto markets” in recent days. “During these extreme episodes, we’ve historically seen an uptick in stablecoin activity, made evident by Tether’s recent US$60 billion milestone as demand continues to grow. Events like these even support the ecosystem’s strength and help everyone refocus back to building rather than the distraction of token price gains.”
Tether is not the only stablecoin showcasing its ability during the recent market downturn as USDC and BUSD have grown to be sizable competitors. USDC now has a market valuation of around $20 billion on Monday and BUSD has around $8.6 billion.
While USDC does have a larger market cap, BUSD has higher trade volumes today. At the time of writing, Binance’s stablecoin BUSD has around $9.9 billion in 24-hour trade volume and USDC has $6 billion. Other notable players in both market cap and stablecoin daily trade volumes on Monday include tokens like DAI, UST, PAX, and TUSD.
What do you think about the trillion-dollar reported trade volumes recorded during the end of May? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Coinecko, coincheckup.com,
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Tether Audit and Binance Investigation - What’s the Future of Stablecoins?
Singapore, May 24, 2021 (GLOBE NEWSWIRE) – (via Blockchain Wire) Stablecoins, including Samecoin, have been an important part of the cryptocurrency industry for a long time. They are built as a way of storing digital currency with a stable value that is pegged to a fiat currency, in this instance: USD. But the actual stability and security of some of the biggest stablecoins have long been a murky area. Especially with the biggest stablecoin around, USDT (Tether).
Tether’s recent audit hasn’t stopped the critics
USDT recently hit the news as it underwent a major “audit”, partly to stay in compliance with a recent settlement agreement made between Tether and the New York Attorney General’s Office. But the veracity of this audit has been called into question by many crypto experts. Seen as an attempt to answer critics on what actually backs USDT, the audit still left many unanswered questions.
While Tether released a range of different figures, including that their reserves were made up of 65.39% “Commercial Paper”, no more detail was given—like the individual ratings of these backings or who they were issued by. Tether did not declare who the borrowers of loans were or what the collateral backing them was.
This still leaves a lot of uncertainty around USDT, and has not fanned flames on the rumors that Tether prints tokens in order to back up the market and keep the price of USDT at $1.
Investigation into Binance is another blow for their stablecoin
Major crypto exchange Binance has recently come under Federal investigation for potential money-laundering and tax issues. This casts more doubt on their own stablecoin, BUSD—one of the major and fast-growing stablecoin on the market.
This recent news has caused many to look for an alternative stablecoin option, and has undoubtedly increased the prospects for Samecoin’s new ecosystem. Samecoin has a family of stablecoins like SameUSD that offer a number of benefits in a congested stablecoin market.
Why SameUSD might be the answer
Completely audited (by CertiK) with fully-transparent results, and with a clear smart contract listing exactly what backs every part of the Samecoin ecosystem, SameUSD stays pegged to the value of the dollar by being tied to a basket of other stablecoins—making it resilient against fluctuations so it always stays at $1.
Transparency is at the core of Samecoin’s offering—unlike many other coins that have often been opaque. Samecoin’s stablecoins like SameUSD and SameEUR offer a completely stable environment for people to enjoy the benefits of digital currency with a spendable currency that they can understand, and a coin that they can be sure will retain its stable value. Samecoin’s ecosystem also comes with an easy-to-use payment application, SamePay.
If recent developments have shown us anything, it’s that more transparency is needed in the crypto world, especially when it comes to stablecoins. Samecoin’s SameUSD gives users an extra level of peace of mind and a currency they can trust at all times, unlike some other alternatives. That’s why many experts are starting to recommend Samecoin for your stablecoin needs.
To learn more, follow Samecoin on Twitter and Telegram.
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