"USDT is crazy." At 6 o'clock in the morning on April 8, Bimin Xiao Ce said in the group, with a dumbfounding expression, "(USDT) 7.03 (yuan)."
In the past month, USDT rose from a low of 6.76 yuan to 7.03 yuan this morning, an increase of 4%.
At this moment, if a buyer buys USDT, which is anchored to the U.S. dollar, on the OTC platform, he finds that the lowest selling price is 7.08 yuan, which is about 5.3% higher than the U.S. dollar-RMB exchange rate (6.72:1) in the same period, that is, the premium rate is 5.3%.
4% and 5.3% are insignificant and not worth mentioning in the digital concepts of thousands of coins and hundreds of coins in the blockchain world, but when this figure is reflected in USDT, which is positioned as a stable currency, it is enough to attract everyone's attention .
Odaily's research found that behind the skyrocketing price of USDT is mainly the entry of domestic funds, and an arbitrage industry chain has also been derived.
secondary title
Stablecoins are unstable
"A bull market is coming?"
In the early morning of April 8, Xiao Ce exclaimed in a digital currency discussion group. He threw out a screenshot of buying USDT on the OTC platform of an exchange. The screenshot showed that the price of USDT at this time was fixed at 7.08 yuan, with a premium rate of 5.3%.
The argument given by Xiao Ce is that the premium indicates that USDT has entered the seller's market, and this scenario has been staged many times in previous bull markets.
The market is recovering.
According to TradingView data, the total market capitalization of cryptocurrencies was nearly $180 billion on April 8, the highest since November 2018.
"USDT is considered to be the touchstone of the market." A digital currency analyst who did not want to be named said that the reason is related to past market laws.
In January last year, when the price of Bitcoin was still at 17,000 US dollars, USDT reached its highest price: 7.77 yuan.
According to non-small data, in the fourth quarter of last year, when the currency market was getting colder, the circulating market value of USDT dropped from 2.8 billion US dollars to the lowest point of 1.676 billion US dollars. This number has now recovered to 2.134 billion US dollars.
However, quite different from the high price of USDT against RMB, according to non-small data, the price of USDT against USDT has been stable within 1% in the past month.
The high premium of RMB against USDT is understood as the entry of new RMB funds. "Investors can't wait to buy USDT with fiat currency to invest in other virtual currencies." Xiao Ce explained.
In addition, snapping up GT point cards has become a hot behavior in the blockchain industry. "The surge in USDT may also be caused by the rush to buy the platform currency of Gate.io." Investor Zhuang Cheng said.
At 12 noon on April 8th, Beijing time, the cryptocurrency exchange Gate.io launched the platform token GT (Gatechain Token) and launched the GT distribution plan. In short, it is to use USDT equivalent currency to purchase point card packages and obtain corresponding GT.
On this day, Gate.io plans to distribute 40 million GT and raise 16 million USDT.
This is considered to be the reason for this round of USDT skyrocketing.
But regardless of whether Gate.io is the "culprit" behind it or not, the USDT premium represents the entry of domestic incremental funds.
Regarding the skyrocketing price of USDT, Pan Chao, head of MakerDAO China, gave an explanation: "Because relying on the platform currency of the exchange, a lot of funds have recently entered the market."
secondary title
Seize the Stablecoin Market
In the past year, almost all major blockchain companies have announced their entry into stablecoins.
In August last year, Terra, a stablecoin project launched by Korean e-commerce platform TMON, received $32 million in seed round financing. Rarely among the investors are Binance, Huobi, and Okex, the three major domestic exchanges.
In October last year, Huobi announced the launch of HUSD, a comprehensive stablecoin solution. In January of this year, Huobi was rumored to be launching a stablecoin.
On January 23 this year, according to news from finextra, another well-known company in the industry, Blockstream, a blockchain infrastructure company, is cooperating with Japanese technology company Digital Garage and FS company Tokyo Tanshi to establish a joint venture. The project is a stablecoin pegged to the yen.
On March 5, Tether, the issuer of USDT, announced that it has reached a cooperation with the TRON Foundation, and is expected to launch USDT that meets the TRC-20 technical standard on the TRON chain in the second quarter of this year.
On March 28, OK Group announced the launch of the stablecoin OKUSD. Prime Trust, an American trust institution, announced on its official website that OK Group has completed its strategic investment in Prime Trust. In the future, the two parties will jointly launch the stable currency OKUSD based on OKChain.
At the same time, a member of the BCH community told Odaily that BCH also plans to launch a BCH-based stablecoin project in the near future, "The sharp expansion of the stablecoin market is the basis for a bull market."
Even financial giant JPMorgan Chase announced the launch of a stablecoin-like JPMCoin on February 14 this year.
In fact, on the other hand, stablecoins ignore bulls and bears, which is reflected in the price and profit model of stablecoins.
On September 10 last year, the New York Department of Financial Services approved the stablecoins Gemini Dollar (GUSD) and Paxos Standard (PAX), and regulated stablecoins were born. In just one month, more than 10 stablecoins broke out around the world, causing a wave in the bear market.
The issuance of stable coins is understood by Mikko as a financing behavior. Mikko is the author of the "Stable Digital Currency Handbook". He has publicly stated that ICOs are like equity financing, and stablecoins are similar to debt financing.
Regarding the profit model of stablecoins, Pan Chao introduced that USDT’s revenue model is not the mortgage interest and transfer fees that the public understands, but the transaction fees of the exchange itself. “USDT can drive transactions, and the exchange fees in Bitfinex That’s where USDT earns the most.”
secondary title
How big is the stablecoin market?
How big is the stablecoin market?
In December last year, Wang Zhuo, executive general manager of Xinpai Capital, said in an interview with Odaily that the stablecoin market will be a market worth hundreds of billions of dollars.
"Stablecoins have completely turned around this year. There were many misunderstandings about stablecoins before, or no one cared about them at all. I told people that stablecoins are very valuable in the first half of the year, but someone asked me that this thing cannot be speculated. What is he doing? As a result, after Gemini and Pax came out, everyone wanted to do it.” Wang Zhuo said.
Pan Chao also said that there are mainly two models of stablecoins in the market: legal currency mortgage and digital asset mortgage. The USDT issued by TEDA belongs to the former, which provides access to virtual digital assets. It can put assets such as gold on the chain. It is an endogenous currency in the blockchain. Like the legal currency market, it will be a trillion-dollar market.
On the other hand, most stablecoins that are collateralized by fiat currencies have not been recognized by the blockchain world, because the prerequisites for stablecoins are generally the same as those of currencies, requiring solvency, liquidity, and credit endorsement. The issuer must act like a bank in the traditional financial market, which violates the spirit of blockchain decentralization.
In addition, stablecoins have been questioned as unstable due to reasons such as insufficient capital reserves, the authenticity of reserves, and fluctuations in collateral prices.
On December 17 last year, the total market value of USDT rose to the fourth place, and it was criticized by everyone as "centralized currencies surpass decentralized currencies".
Pan Chao introduced that the current stablecoins on the market are still a competitive market. The relationship between fiat currency mortgage and digital asset mortgage is not a complete competition, and digital mortgage stablecoins have not yet reached a saturated state.
According to data provided by InVault, as of February this year, there were 54 stablecoins, 45% of which were active.
Interestingly, stablecoins based on fiat currencies are seeking regulatory approval in various countries.
For example, the above-mentioned joint venture called Crypto Garage established by Blockstream and others has been officially authorized by Japan to carry out the first blockchain financing project under the sandbox of the Japanese regulatory agency.
On the other hand, last October, according to Bitcoin, Japan’s top financial regulator, the Financial Services Agency (FSA), stated: “In principle, stablecoins pegged to fiat currencies are not classified as “virtual currencies” under the Payment Services Act. For its issuers and traders, the law also has specific registration requirements.”
On the evening of the 8th, USDT was falling, and the price of USDT on major OTC platforms dropped to 6.95 yuan, a decrease of 1.1% compared to 7.03 yuan in the morning.
"Through arbitrage and other methods, the market price of USDT is unsustainable, and the premium is only a short-term phenomenon." Pan Chao said.
