September 10th, 2020
Analysis: Crypto had a bounce back after an overall sudden drop the previous week. Bitcoin briefly dropped below $10,000 USD ($13,168 CAD) but has since recovered to hold $10,300 for the past 48 hours. Much to the chagrin of the ‘non-correlated’ crowd, the sudden crypto sell off and recovery seemed to mimic a similar sell off and recovery in the stock market.
The Last Two Months Has Seen As Much Of An Upheaval Of The Top 10 Cryptocurrencies By Market Cap As Any Period In Years – We Provide A Recap And Take A Closer Look At USDt (Tether).
Takeaway: Unsurprisingly, the driving factor of market cap growth in the last few months has been DeFi. ETH and USDt collectively have added just under USD 20B in market cap since the beginning of July. The growth in ETH and underperformance of other chains comes at a time when app-developers are actually looking for back-up chains as Ethereum approaches a precarious transition from proof-of-work to proof-of-stake consensus algorithms. Furthermore, seeing the fall of tokens like XLM and EOS in favour of newer “hot” protocols like Chainlink and Polkadot is a reminder of how sentiment-driven the crypto space continues to be.
September continues an amazing year for USDt, which had a market cap of just over USD 4B at the beginning of 2020. The token is benefitting from a perfect storm of factors. Trading venues in the space continue to innovate and favour USDt in most pairs denominated in stablecoin. In addition, the wave of activity in DeFi has shown a new use case for Tether both on DEXs and as a rail when navigating different yielding platforms. After a difficult 2019 which saw a variety of legal issues for the company and a brief decline in market cap, the company has re-established itself as the dominant stablecoin provider and continues to innovate in the space.
South China Morning Post: Cryptocurrency: The Next Battleground In The US-China Rivalry
Forbes: Ethereum Is Eating Bitcoin
Disclaimer: The opinions and analysis expressed in this newsletter are those of the writer, and not of Bitbuy. Nothing in this note should be considered investment advice.