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Bitcoin is going to reach $1 trillion in settlement in 2020, while stablecoins have already seen their biggest year ever. The stablecoin monetary base increased by $3.8 billion.
Cryptocurrency public blockchains will work out more in this year than ever before and have already surpassed $1.3 trillion, according to data by analytics firm Messari. The company reported on July 21 that the figures are showing Bitcoin (BTC) managed to hit $712 billion in settlement so far this year, while Ether (ETH) stands at $147 billion.
The Ethereum network, which supports stablecoins including market cap leader Tether (USDT), managed to add an additional $423 billion to its overall volume. The rise in combined stablecoin transaction value is pretty evident, especially if you look at the first seven months of 2020 that surpassed last year’s total of $337 billion and 2018’s $146 billion.
In the analysis, stablecoin volumes have corresponded with two current trends. The first is the COVID-19 related panic on the financial markets. In the last quarter, the amount of money in circulation increased by $3.8 billion dollars after growing by $2.4 billion in the previous quarter.
Most of that growth was from the above-mentioned Tether. It now accounts for more than $10 billion of the stablecoin market cap of $12 billion. The analysis says that “USDT alone may very soon surpass Bitcoin as the dominant currency on public blockchains.”
As an example, we have sUSD, launched by Synthetix in January, and Binance Stablecoin (BUSD), which began trading in September of last year. Both of these tokens revealed strong growth in relative terms. However, they have some ways to go before catching Tether, the Bitfinex-linked stablecoin that’s been in circulation since 2014.
Ethereum Passes Bitcoin in Daily Settlement Value
Messari says that the overall record for settlement is a stable and constant exclusion of the concept that cryptocurrencies cannot battle with legal systems as a means of payment.
The report says:
“Many people think blockchains have failed as payment systems. The typical argument goes something like, ‘you can’t buy a cup of coffee with Bitcoin, therefore it has failed as a payment system.’ Along this line of argument cryptocurrencies like Bitcoin and Ether also suffer from extreme volatility making them unable to serve as payments mediums. Both premises aren’t entirely inaccurate, but the conclusion definitely is. In fact it is about $1.3 trillion wrong.”
Researcher Ryan Watkins claimed that it was improper correlating blockchains to payment networks such as Visa. A better correlation would be the umbrella settlement systems of the fiat domain, such as Fedwire.
Watkins added that the settlement figures add another feather in the cap of Ethereum, which has been the main public blockchain for stablecoins for some time.
“All said Ethereum accounts for more than 65% of all stablecoins issued, and more than 85% of stablecoin transaction value.”
Removing Dependence on Fiat
Cryptocurrency consumer payments are still securely within the discovery phase. Many traditional options represent a “bridge” to fiat, as are, for example, cryptocurrency debit cards.
These, and anything else that relies on the fiat economy, are also subject to turmoil due to centralized control of the basic infrastructure.
Let’s just mention the clearance of Germany’s Wirecard earlier this month which for a short time caused European cryptocurrency debit cards to stop working.
Decentralized cryptocurrencies, and especially Bitcoin, are made to make it impossible for a third party to control network activity.