The use of the Ethereum network to move value around has shot to record levels, thanks to the growth of stablecoins. Since the coronavirus crisis had started, in the second week of March, we mentioned the obvious correlation between Bitcoin price and the global markets. Billionaire Mark Cuban has always been cautious when it came to the topic of cryptocurrency, and in the past, he has warned others to be careful with it. So, what would it take for the “Shark Tank” investor to change his mind?
The use of the Ethereum network to move value around has shot to record levels.
A Wednesday tweet from Ryan Watkins, research analyst at Messari, revealed data showing that the total value transferred on the Ethereum network, including ether (ETH) and ERC-20 stablecoins, now matches that of the Bitcoin network.
The numbers show that “Ethereum is becoming the dominant value transfer layer in crypto,” he said.
Value transfer refers to the U.S. dollar value of the total units on a blockchain that are transferred on a given day. With Bitcoin, the metric refers to the USD value of all the bitcoin (BTC) sent on a given day.
Value transfer on Ethereum differs slightly. As well as its own ether (ETH) cryptocurrency, Ethereum supports assets from third parties that can be sent and received over its network. For the above chart, value transfer on Ethereum refers to the USD value of both ETH and the Ethereum-based stablecoins that are transferred on on a given day.
Another chart from Messari show just how much the increase in the amount of value moved via USDT has boosted Ethereum`s numbers over the last few months.
Citing concerns about the validity of Watkins` findings, independent developer Udi Wertheimer expressed his thoughts regarding the exclusion of Omni data, a software layer on the Bitcoin network that includes the issuance of the world`s most used stablecoin, tether (USDT). The Ethereum chart had included data for USDT issued as an ERC-20 token.
“USDT on Omni is bigger than all the non-USDT Ethereum-based stablecoins. If you include USDC and the smaller ones, you should also include Omni-USDT,” Wertheimer said.
But Watkins was quick to answer back, arguing the conclusion remained the same.
“Furthermore, the amount of value transferred on Ethereum is slightly underestimated because it only includes the top stablecoins that CoinMetrics provides data for, and not all Ethereum based tokens,” he said.
According to its “transparency” page, Tether says it has up to almost $4.9 billion USDT on Ethereum, while it has up to $1.55 billion on Omni.
In his tweet thread, Watkins also noted that stablecoins have just had their best quarter to date. Issuance in the first quarter of this year, he said, had “ballooned over $8 billion,” adding almost as much to the category`s market capitalization in Q1 as for all of 2019.
“Over the past two years, many stablecoin issuers have created stablecoins on Ethereum because of its flexible token standards that allow for the easy issuance and interoperability,” according to Watkins.
“These stablecoins have grown so great in amount that they`re now being widely used as money on the Ethereum blockchain. Instead of sending and receiving value in ETH, which is volatile, users can send value in stablecoins which are price-stable with the US Dollar,” the researcher said.
Author: Wolfie Zhao
Bitcoin Price Analysis: Stuck Inside a Tight Range (Again), BTC Awaits The Next Huge Move – The Calm Before The Storm?
Since the coronavirus crisis had started, in the second week of March, we mentioned the obvious correlation between Bitcoin price and the global markets.
Since the crisis started, the lowest point of Bitcoin was reached together with the S&P 500’s low, and the impressive correction can be seen on both assets’ charts.
However, unlike the S&P 500, which reached a new April high following Tuesday’s 4% rally, and Gold’s 8-year high, Bitcoin barely moved. Is it a bearish sign? It could indicate on weakness, but it can also point on decoupling from the correlation.
The fact is that Bitcoin is trading again between the $6800 and the $7000 range. Despite an abnormal move (the pump to $7200 and the dump to $6600), the above range defines Bitcoin’s behavior for the past five days.
Because Bitcoin doesn’t like to stay for a long time at one spot, and the RSI is also indecisive around the 50 range, along with declining amount of volume, we predict that a breakout from this range is likely to take place soon.
In case of a breakdown of $6800, the $6600 could be crucial for the bulls. Looking at the 4-hour chart, we can see a Head & Shoulders pattern that can play out, with a target at $5700 in case of breaking down the $6600 in the short-term.
Total Market Cap: $197 billion
Bitcoin Market Cap: $126 billion
BTC Dominance Index: 64.1%
*Data by CoinGecko
– Support/Resistance levels: As mentioned above, Bitcoin is trading between $6800 and $7000 for the past days.
From below, in case $6800 gets broken, then the next support level lies at $6550 – $6600. This is followed by $6400 and the $6000 – $6200 price area.
From above, in case $7000, along with the descending trend-line (4-hour) and the 50-days MA (daily chart, marked by pink line), gets broken up, then the next resistance is the $7200 zone, followed by $7400 – $7500 which is where the monthly-high lies.
– The RSI Indicator: As discussed above, the RSI is indecisive around the 48-50 range. If the price breaks above or below the range, we will likely see a reflection on the RSI.
– Trading volume: As expected, the tight range carries a low amount of volume. Another sign that a significant move is coming.
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Cryptocurrency charts by TradingView.
Mark Cuban: This is what it would take for me to change my mind about bitcoin
Billionaire Mark Cuban has always been cautious when it comes to bitcoin – despite being an investor in businesses built on cryptocurrency and even personally investing in bitcoin himself, he frequently warns others to be careful because he finds it to be a gamble.
Cuban has gone as far as to say he would “rather have bananas than bitcoin” because at least as food bananas have intrinsic value, he told Wired.com in September.
So what would it take for the “Shark Tank” investor to change his mind and comfortably support bitcoin?
“It would have to be so easy to use it`s a no-brainer,” Cuban said on “The Pomp Podcast” on Wednesday. “It would have to be completely friction-free and understandable by everybody first.” So easy, in fact, that “grandma could do it.”
“Then you could say it is an alternative to gold as a store of value,” he said.
For one thing, bitcoin would have to become easier to use in payment transactions while shopping, he said.
“You`ve got to be able to spend it, because right now you still have to convert it for anything that you want. And as long as you have to convert it, you`re still dependent on fiat [or government-backed currency]. No matter what you say,” Cuban said on the podcast.
Comparing bitcoin to bananas again, he added, “I can trade bananas easier as a commodity than I can trade bitcoin. And I can still eat that banana before they goes bad, and get all my potassium for my workouts!”
“With gold, at least there`s gold coins – I could use gold bars as furniture. But with bitcoin, it`s virtual, and that`s its beauty and that`s its problem,” Cuban said on the podcast.
“Now, the fact that we`re arguing so much about it, and you have so many stands on bitcoin, that just proves the point that it`s difficult,” he said on the podcast. “And you can`t spend it on anything.”
Cuban says there are so many unusual parts of bitcoin, like “the halving” and “the mining,” which makes it very complicated to understand.
“Blockchain is a great opportunity, but the reality is, we haven`t seen blockchain applications really take off,” he said on the podcast. “There`s uncertainty with all the different types of crypto and arguments between them all.”
But “to bitcoin`s potential benefit, if everything goes into the sh—-r because we`re printing so much money and there`s global implications, bitcoin has something to deal with and if we don`t, bitcoin`s got nothing.”
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Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
Author: Taylor Locke