Currently, three of the top ten coins by market capitalization in cryptocurrency are stablecoins. Today, these three coins alone account for nearly $98 billion in stablecoins. As stablecoins continue to grow, they are bringing a tsunami of digital liquidity that is radically transforming how the world transacts.
To bring you up to speed, many of the leading stablecoins work by minting coins on a blockchain, for which there are an equal amount of dollars stored in audited bank accounts. This is why they are often called dollar-pegged stablecoins.
Stablecoins give institutions, online merchants, and retail investors the ability to convert cash or even other cryptocurrencies into dollars. Those dollars can be transacted anywhere in the world within minutes in a secure, immutable transaction without ever touching a bank. They also provide a cash reserve tool in a very volatile crypto market.
The adoption of stablecoins has skyrocketed and all signs indicate further exponential growth in the coming future, especially if inflation isn’t transitory.
The fastest-growing stablecoin of 2021 has been USDC. An interesting fact: at the start of 2021 there were just $1.3 billion circulating USDC coins. Now, it’s reached a staggering $25 billion, demonstrating over 1,800% growth, and it’s only July. $12 billion of USDC, nearly half of that amount, are actively locked in smart contracts.
At Voyager, USDC has become an essential part of our own ecosystem, and the 9% interest APR we offer on USDC has made it the number one stablecoin on our platform. USDC isn’t just a spending tool, it’s also become one of the best savings tools available across all financial services.
We’re not alone in recognizing USDC’s potential, evidenced by all the good press it received this week. Messari, the research analytics firm, released a report stating that thanks to USDC’s role in DeFi, it’s become the preferred dollar-pegged asset. This means it is now on pace to become the #1 most dominant stablecoin on Ethereum. (CoinTelegraph)
Circle also announced that USDC was now added to the Tron Blockchain. USDC, which started on Ethereum, is already available on four major blockchains and has plans to expand to 10 more. (NASDAQ)
Cryptocurrency and blockchain bring an entirely new layer of value and transactability across the internet and our everyday digital interactions. Now, this value layer is starting to infiltrate a wide variety of use cases, from gaming, to art and NFTs, fundraising for charity, and more.
One of the most ironic things about stablecoins is they often serve as a liquidity bridge into the crypto market, especially into Bitcoin. Bitcoin, of course, by many arguments, is a hedge against the dollar itself.
This is why with every passing week we get more news of institutions and funds getting involved in Bitcoin. This week, controversial billionaire, George Soros, announced his $28 billion fund has been actively trading Bitcoin and other cryptocurrencies as an experiment in the space. They are also exploring acquisitions of blockchain-based firms. (Bitcoin Magazine)
But this announcement pales in comparison to the news that a new German law is now in effect and could theoretically prompt $415 billion in investments into the crypto market. “Germany’s Fund Location Act, introduced in April and approved by parliament shortly thereafter, permits “Spezialfonds,” or special funds, to invest as much as 20% of their portfolios in crypto.” (Nasdaq)
As crypto miners leave China, stories are popping up everywhere about new investments in mining firms in the U.S. It’s for this very reason, “Despite not having a clear regulatory framework on cryptocurrencies, the United States has positioned itself as the ‘most crypto-ready’ nation in the world based on several key metrics, such as Google searches, crypto ATM saturation and legislation.”
“The 2021 Crypto-Ready Index, courtesy of research firm Crypto Head, gave the United States a top score of 7.13 out of 10.” (CoinTelegraph)
The U.S. is currently well-positioned to be the crypto leader of the world, perhaps ushering in the next era of digital transformation we saw from the dot-com boom, which peaked in 2000. By many estimates, the adoption of crypto in the U.S. is actually equivalent to where the internet was in the year 2000.
And naturally, the banks don’t want to be left behind. Consider this: “650 U.S. banks and credit unions will soon be able to offer bitcoin purchases to an estimated 24 million total customers.” (Forbes)
As the massive wave of digital assets continues to grow, there is a rising swell of liquidity finding its way into the crypto market. Surf’s up.
Top market movers as of July 2, 2021
- StormX (STMX) +66%
- Compound (COMP) +60%
- Ethereum Classic (ETC) +33%
- Elrond (EGLD) +30%
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Voyager Cryptocurrency Risk Disclosure
All investments involve risk and the past performance of a digital asset or other financial product does not guarantee future results or returns. Cryptocurrencies are highly speculative in nature, involve a high degree of risk and can rapidly and significantly decrease in value. It is reasonably possible for the value of Cryptocurrencies to decrease to zero or near zero. While diversification may help spread risk, it does not assure a profit or protect against loss. Investors should consider their investment objectives and risks carefully before investing. Previous gains may not be representative of the experience of other customers and are not guarantees of future performance or success.