At present, stable currency is obviously in the golden age of great development. Stable currency connects the trading media status between the real world and the blockchain world, making stable currency a hot business. In 2019, more than $237 billion of wealth will be transferred to the chain through stable currency. This fully shows that companies that issue stable coins, such as tether and other companies, obtain a large amount of US dollar cash through the sale of stable coins, and these cash can make large profits through various financial operations in the real world. Such a good thing naturally began to attract the attention of giants and even countries. In terms of stabilizing the currency, we can see the following progress and trends:
1. TEDA usdt has consolidated its position as the king of stable coins and still accounts for about 80% of all stable coin transactions. TEDA usdt occupies the leading role of stable currency in terms of Omni protocol of bitcoin, erc-20 protocol of Ethereum and wave field protocol.
2. Maker Dao’s Dai has become the main stable currency of decentralized financial defi type. This is closely related to Ethereum’s position as the main chain of decentralized finance. Therefore, Dai is experiencing rapid growth.
3. Traditional giants try to intervene in Libra’s attempt to stabilize the currency market. Although Libra’s attempt by Internet giant Facebook and several traditional payment giants has been blocked in the U.S. Congress in the short term due to its great ambition not only to be a stable currency, but also to become a transnational legal currency, it is estimated that it is very likely to eventually appear in a stable currency pattern.
4. The upcoming issuance of DCEP by the Central Bank of China represents the advent of the era of digital legal currency. As a digital currency, DCEP is easy to get through the chain. After being issued in 2020, it can become a new generation of stable currency with stronger credit, which poses a major threat to usdt and other private stable currencies.
5. The proposal of the US dollar fedcoin plan represents that the US dollar will eventually form its own digital currency. The fedcoin plan is not just an idea, but has begun to be promoted. It is not surprising that it will become a reality a few years later.
The above facts and trends are sufficient to illustrate the great development of the stable currency. In the future, the stable currency will obviously experience fierce competition in order to stabilize their respective patterns and form interest division.
While stabilizing the development of coins, we can find that the development of stable coins has a significant impact on the development of Tete coins. In fact, stable currency amplifies the rise and fall of bitcoin, increases the volatility of bitcoin, and makes bitcoin a high-risk hedging asset rather than a stored value asset. People change cash (US dollars) into stable currency. In fact, holding cash itself is a short-term hedge relative to holding other real-world assets. Bitcoin has become their short-term arbitrage means. When the political and economic situation is tense and bitcoin is likely to rise, they use stable coins to buy bitcoin in an attempt to gain an increase. When the situation eases and bitcoin may fall, they sell bitcoin in exchange for stable currency. When there is no market, they use stable currency to finance and obtain stable income. Bitcoin in such a rise and fall operation, stable currency makes both rise and fall amplify the fluctuation.
The impact of stabilizing bitcoin is obvious that bitcoin poses practical difficulties whether it wants to become a stored value asset such as digital gold or a means of daily retail payment. Because both goals need to reduce the volatility of bitcoin in the future. Because individuals believe that the development direction of bitcoin is mainly stored value assets, a question naturally arises. Can the future volatility of bitcoin be reduced under the interference of stable currency? Can bitcoin become a major human stored value asset like gold?
The result of thinking is that bitcoin still has the possibility of becoming digital gold in the future. Why?
1. Now the high volatility of bitcoin amplified by stable currency is still the result of bitcoin price is not high enough and the overall market value is too small. We can think of bitcoin as a hook casting. Only when the market value is very large (the object is very heavy) can it become a fixed anchor of the giant ship (economic wealth). When the market value is relatively small (the object is very light), obviously, it can not be fixed by the giant ship functionally, and it can only be a hook that can be pulled by the rope and thrown around. Heavy anchor and light hook, weight (market value scale) will determine whether bitcoin becomes digital gold or only a risk hedging asset!
2. From this perspective, bitcoin needs to undergo a big jump in market value. This transition may take a long time, through two or three bull markets. When the price of bitcoin continues to rise over time and the market value scale reaches a considerable height, such as the market value scale of some similar to gold, this volatility will decline with the increase of scale and not easy to hype. More importantly, at that time, many stable coins were not anchored French coins, but anchored bitcoins. This “anchor change” means that bitcoin has officially become digital gold! If the stable currency changes anchor bitcoin, in fact, the stable currency is no longer the culprit to amplify the fluctuation of bitcoin, but a helper to help stabilize the valuation of bitcoin!
Therefore, it is clear that whether bitcoin can realize large-scale market value in the future and promote the exchange of some stable coins for anchor bitcoin will be the key to whether bitcoin can become a “digital gold” stored value asset. This truth is easy to understand. Just like a person practicing boxing, when his kung fu is not strong, he can only be used as a partner. Only when he is really strong, can he compete on the stage and become a real boxer and let others become a partner. Strength (market value) determines position!
The above is the blues thinking about whether bitcoin can become a digital gold stored value asset in the future after stabilizing the currency and amplifying the volatility of bitcoin. The words of a family are for reference only. I’m not afraid of floating clouds to cover my eyes, only because I’m in this mountain!
Standing in the future and looking at the present, blues feels the wind of the times with you!
Editor in charge: Tang Jing