Crypto: Why Tether became a U.S. dollar replacement for many Chinese
Tether accounts for 93% of stablecoin use in the region.
Published 11 hours ago
on August 21, 2020
China, the world’s second-largest economy seems to trust the world’s fastest-growing financial asset ecosystem (Tether) a lot more these days, preferring to use it to meet most money transfer needs.
Tether, which is the fourth most valuable crypto by market cap, accounted for more than $18 billion of the outflows from East Asia in the period, according to new research by blockchain forensics firm Chainalysis. Tether, a stable coin (this is because its value is pegged to the U.S. dollar), accounts for 93% of stablecoin use in the region.
Approximately $50 billion cryptos had left China in 2019, showing a surge in how investors are dodging rules that limit how much capital they’re allowed to transfer from China.
“Stablecoins like Tether are particularly useful for capital flight, as their USD-pegged value means users selling off large amounts in exchange for their fiat currency of choice can rest assured that it’s unlikely to lose its value as they seek a buyer,” Chainalysis said in the report.
Note that China only allows citizens to move the equivalent of $50,000 or less out its borders every year. Wealthy citizens usually beat such restriction by going through foreign investments in real estate and other assets, sometimes even using offshore registered businesses to carry out their investments.
Tether Chief Compliance Officer, Leonardo Real, recently explained while Tether’s price is intended to remain constant at $1. He said:
“It can sometimes fluctuate by a few cents at times of high price movement in the wider cryptocurrency market. When this happens, primary market traders are incentivized to close the gap by selling tethers at the higher price”
The fourth most valuable crypto is a stablecoin and still, by far, the biggest. It was launched in late 2014 by a group called Tether Limited. It introduced a relatively simple concept for creating a crypto asset that maintained a stable price.
For every USDT issued, the Tether Foundation kept $1 USD in reserve (at least in theory). This kept the USDT price stabilized around $1 since each unit of USDT could be redeemed for one of the US Dollars in the reserve.
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Quick fact: Tether is designed as a blockchain-based cryptocurrency whose digital coins in circulation are backed by the same value of traditional fiat currencies like the U.S dollar, Japanese Yen, or the Euro. It trades under the ticker symbol USDT.
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Olumide Adesina is a French-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading. A member of the Chartered Financial Analyst Society. Financial Market; Yale University, Behavioral Finance; Duke University. You can follow Olumide on twitter @tokunboadesina or email firstname.lastname@example.orgCLICK TO COMMENT
Bullish Signs: 2.6 million Bitcoins are being held on crypto exchanges
Bitcoin bulls have been on a bullish run, triggered by high liquidity in the global money markets.
Published 1 day ago
on August 20, 2020
Over the past few weeks, the selling pressures and high volatility usually experienced in the most valuable crypto market have greatly reduced.
The decline of BTC exchange balances signals reduced selling pressure. Currently, 2.6 million BTC is being held on exchanges. This is significantly lower than the last time Bitcoin hit a local top a year ago (2.8M), and lower than before the sell-off in March (2.9 million).
READ: Twitter Poll: Bitcoin price expected to reach $100,000 by 2021https://platform.twitter.com/embed/index.html?creatorScreenName=https%3A%2F%2Ftwitter.com%2Ftokunboadesina&dnt=true&embedId=twitter-widget-0&frame=false&hideCard=false&hideThread=false&id=1296087237365575686&lang=en-gb&origin=https%3A%2F%2Fnairametrics.com%2F2020%2F08%2F21%2Fcrypto-why-tether-became-a-u-s-dollar-replacement-for-many-chinese%2F&siteScreenName=Nairametrics&theme=light&widgetsVersion=223fc1c4%3A1596143124634&width=550px
Still, the number of Bitcoin entities holding at least 1,000 BTC continues to grow.
These metrics show sign of investor confidence, as Bitcoin’s long-term price prospects reached its highest level since August 2017.
Bitcoin bulls have been on a bullish run, triggered by high liquidity in the global money markets. Investors remain bullish in the long term despite the blurred global economic outlook and resurgence of the COVID-19 virus.
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The percentage of supply owned by entities holding ≤ 10 $BTC grew from 5.1% to 13.8% in 5 years, while the percent held by entities with 100-100k BTC declined from 62.9% to 49.8%.
These show that more retail investors are grabbing a stake on the most popular crypto asset, thereby diminishing the strength of BTC whales.CONTINUE READING
Toyota backed crypto, OmiseGO, gains 19%
The parent company of OmiseGo, about two months ago secured $80 million in capital.
Published 1 day ago
on August 20, 2020
OmiseGO, an Ethereum token that energizes smart contract platforms and trades under a ticker known as OMG, is fast gaining the attention of investors and crypto-traders globally.
Data from Santiment Research company on Twitter showed that OMG had defied the altcoin Wednesday, bleeding “with a solid +19% price performance in the past day. It’s the second trending crypto-asset according to our percentage gain from mean social data, and it’s enjoying the largest long-term social spike since April.”
READ: Unknown ETH Whale moves $35 million dollars worth of Ethereumhttps://platform.twitter.com/embed/index.html?creatorScreenName=https%3A%2F%2Ftwitter.com%2Ftokunboadesina&dnt=true&embedId=twitter-widget-1&frame=false&hideCard=false&hideThread=false&id=1296257653744652289&lang=en-gb&origin=https%3A%2F%2Fnairametrics.com%2F2020%2F08%2F21%2Fcrypto-why-tether-became-a-u-s-dollar-replacement-for-many-chinese%2F&siteScreenName=Nairametrics&theme=light&widgetsVersion=223fc1c4%3A1596143124634&width=550px
Thailand-based Fintech firm, SYNQA, the parent company of OmiseGo (previously called Omise Holdings), recently secured $80 million in capital via a Series C investment round led by SCB 10x, a subsidiary of the Siam Commercial Bank. Asia-based VC group SPARX also took part in the round.
Other investors include Japan’s Toyota Financial Services Corporation, Sumitomo Mitsui Banking Corporation, SMBC Venture Capital, and the Aioi Nissay Dowa Insurance Corporation.
Data from Coinmarketcap, the crypto analytic ranking firm, showed that it’s now ranked the 34th most valuable crypto asset with a market capitalization of $486 million.
What gives OMiseGo the edge over many altcoins is its total limited supply of just 140,245 million OMG coins. This shows that the crypto asset is very unlikely to suffer from asset dilution.
What you need to know: The OMG coin was designed as a white-label eWallet. It was designed on the Ethereum blockchain by a Thailand-based financial services company called Omise. Its full name is OmiseGo.
OmiseGo helps in easing the transfer of coins from one blockchain to another without using a crypto exchange.
Most blockchain ecosystems are limited by low throughput, high and unpredictable transaction fees, and poor user experience.
The project’s team believes these are barriers that need to be overcome before businesses and developers will adopt blockchain for real-world applications, leading them to develop the OMG Network.
Just recently the federal agency in charge of regulating crypto assets in Japan, the Financial Services Agency (FSA), has given OMG Network, formerly known as OmiseGo, approval for the sale of its native crypto coin in the world’s third-largest economy.CONTINUE READING
Ethereum founder sold his ETH for $700
Ethereum’s baseline metrics still justify it as being one of the safest long-term holds in crypto.
Published 2 days ago
on August 19, 2020
Ethereum (ETH) founder, Vitalik Buterin, recently admitted that he sold (and gave away) his Ether holdings for cash when the price was just $700.
While he did not say he sold his entire ETH stake, which is rather unlikely, Nairametrics has not been able to figure out how many ETH coins was actually sold.
“I sold ETH at $700, or about half the top (actually, both sold and donated). The Ethereum Foundation sold at $1200, and that money has gone into devs and grants since then,” he tweeted.
READ: Investors are now rushing into Ethereum, as gains surge by 262% in 4 monthshttps://platform.twitter.com/embed/index.html?creatorScreenName=https%3A%2F%2Ftwitter.com%2Ftokunboadesina&dnt=true&embedId=twitter-widget-2&frame=false&hideCard=false&hideThread=false&id=1295273692885209088&lang=en-gb&origin=https%3A%2F%2Fnairametrics.com%2F2020%2F08%2F21%2Fcrypto-why-tether-became-a-u-s-dollar-replacement-for-many-chinese%2F&siteScreenName=Nairametrics&theme=light&widgetsVersion=223fc1c4%3A1596143124634&width=550px
Meanwhile, Ethereum’s development activity and baseline metrics still justify it as being one of the safest long-term holds in crypto.
ETH’s fundamental analysis
On a shorter-term scale, Nairametrics’ believes the daily active address versus price model has continued to show a concerning lack of unique addresses on July 27th, which indicated that a push toward a $400 price level could be imminent.
When this came to fruition two weeks later while active addresses remained high, the dropoff of DAA was as steep as it was sudden.
401,700 active addresses were recorded recently, while Ethereum continues to trade around $425. Unless Ethereum’s active addresses gain again to provide fundamental support for its current price action, the viability of Ethereum’s midterm rally may be put to the test.
Meanwhile, Ethereum co-founder, Vitalik Buterin, also spoke about how hard Ethereum 2.0 “was to implement from a technical perspective than he had envisaged.
“I definitely freely admit that Ethereum 2.0 is much harder than we expected to implement from a technical perspective.
“I definitely don’t think that we discovered any fundamental flaws that make it impossible, and I do think it will be finished. It’s just a matter of time, and it’s actually been progressing quite quickly lately.”