Bitcoin Forum

What's your take on that?

Ethereum and stablecoins, do you think that stable coins like usdt has huge impact over ethereum price? 

Do you think that stablecoins cousing ethereum high Volatility? 

Do you think the stable coins are good for ethereum?

My opinion:
I think if there is higher demand to stablecoins then the ethereum price will go up.

Well, why would stable coins generate volatility for Ethereum? I don't really see the correlation. Stable coins like USDT or GOLD are just ERC-20 tokens so they don't really affect the ETH price besides the use of gas(ETH) for smart contracts execution which is a good economic factor for Ethereum, but the transactions are not so frequent so I can put more weight on that. Other than this I don't see any other reason why would the use of Ethereum based stable coins increase the volatility of ETH price action.

It doesn't work that way. There will never have any impact on the price of ETHEREUM whether you buy stablecoin or not. Stablecoin usually use smart-contract in the form of ERC-20 and it only uses the ETHEREUM blockchain for transactions and does not have any direct impact on the price of ETHEREUM. Also stablecoin coins are backed by FIAT and other valuable things, not ETHEREUM itself.

I agree, the only thing which makes impact on ETHEREUM is the tx fees which is close to no impact. Other than that, there's nothing else.

Why would these stable coins have any effect on the volatility of Eth or any other coin? They're useful to convert to when a coin hits a high mark. Let's say Bitcoin hit $22k, you could trade it for USDT at $22k. Then, when Bitcoin drops down to $14k, you then trade your USDT to Bitcoin again and pick up quite a few extra. That's really the only use that they have that I can see. Good for Ethereum? Good for the whole crypto ecosystem in my opinion. They're a good way to get a dollar value of the coin you're trading.

Stable coins are going to be the everyday money in Crypto. With all the top stable coins being built on Ethereum and over half of all stable coins being built on Ethereum, it’s clear what Blockchain these stable coin projects prefer. It’s the chain that gives them what they need. the best blend of dependability, security and decentralization. That’s encouraging to see and has impact on credibility and price of Ethereum at some aspects, directly or indirectly.

Same inputs above on why you are trying to link up usdt to ETH? Seems like you arent aware on how these stable coins being used up to avoid such volatility in crypto.
I dont see any reasons why these stable coins will give out some benefits or goodness with ETH and so as with other coins being paired up with usdt specially btc.
Dont consider nor rely on what usdt can do because theres no such thing talking about price trending factors.These stablecoins are just good for one main purpose which is to save up your a** when theres high volatility in the market or you dont know on how to position yourself.

There will be no effect on the prices of other coins due to stable coins increase or decrease in demand.

If the demand for tether gets increases then they will create more tether and will keep the supply in adequate so the prices is not going to be up.

Stablecoin doesn't have an impact for other cryptocurrencies, it's just like fiat money. Also, stable coin doesn't have volatility and he only can bring a volume trading activity for the cryptocurrency went using a pair stable coin.

The demand will always increase cause Tether using USD, every time the government print money then the demand will follow on "Total Supply" fiat.

I don't think there is a direct correlation between ETH price and the demand for Stable coins. Your analysis is completely off. If it was the case then ETH price would have sky-rocketed way beyond $2000 since around 2018 more stable coins joined the cryptomarket.

USDT may be an asset that can influence the price but there may be others instead, so the price is not only affected by stablecoins and there is nothing that makes stablecoins valuable in this regard.

I do not think stablecoins is the cause of volatility. It can be just a tool for obtain ETH.

The value of the market does not increase by itself, for this we need the money flow into the market. There should be something that adds value from another place and this may come to the market as stablecoin or BTC.

I am a little confused by this comparison, which I understand ethereum is influenced by the price of bitcoin not by usdt.
when the price of bitcoin goes up then all altcoins go down as well as ethereum.

I think both of them have no effect on each other, I mean when the USDT goes up ETH goes up or down and vice versa,
if I see USDT going up when the market is corrected, usdt is made the choice to save assets,
if we want to see the characteristics of the market being corrected, then look at usdt, if it goes up then the market will go down.
so if ethereum prices go up or down it's not due to the usdt, but because the market is undergoing a correction or falling.

You are right, Ethereum is influenced by the Bitcoin and many altcoins are follow the Bitcoin way. But I am little confused of your statement, Because Bitcoin will raise again automatically all the altcoins are slowly raise in the market and stablecoins are always stay in same region. So some fluctuation is disappoint yourself, may be you can moniter all the pump and dump you will realise the crypto circulation.

The use of stablecoins on Ethereum certainly has a positive effect on the network. But they cannot and should not influence the price of Ether itself. Stablecoins are also stable because their value is tied, as a rule, to the American dollar. They cannot add value to the Ether.

Bitcoin has a huge impact not only on ETH but on the whole market in general. USDT is a stable asset that is not completely backed by US Dollar, in other words those guys are printing money based on air and I hardly doubt that this affects crypto prices.

If that stable coin holder buys ETH then I agree with you that really affects ETH price. Most of the investors right now are buying ETH using their stable coin since ETH 2.0 is upcoming and will surely create FUD in the crypto sphere.
But telling that increasing demand for stable coin directly affect ETH price is not true. The one who pumps BTC on its all-time high was USDT(Stable coin) so it means that it depends on the holder of the stable on what they are going to buy which results in a price pump.

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In conclusion: Stable coin doesn't directly affect ETH but rather the owner of it that hype to buy ETH is.  ;D

Why is that? It seems that the two are not connected at all. Could you care to explain more, or do you have already have some charts and graphs that show correlation between USDT's high demand and Ethereum's price rally? For me, there is no significant relationship between USDT and Ethereum. I am also wondering, why would USDT's high demand be a cause to push Ethereum's price?

if they print them out of thin air and then use it to buy the shitcoin for free then they could pump it. but the problem with that strategy is that it falls apart very soon meaning after a while of injecting out-of-thin-air stable tokens into a shitcoin, that circulating supply of that stable coin would crash both markets of the stable coin and the shitcoin that was pumped using it.

Yes it has positive effect but it does not bring value to the others. Stablecoin is used as a form of digital payment in cryptocurrency, it does not affect the value of the crypto itself because it is just used as a tool to make a transaction or saving the position. The only thing that could affect the price of cryptocurrency itself is the demand, no matter how big the demand of stablecoin is. It will not bring any impact to cryptocurrency because it is like you are trying to move your physical money into digital money and then spend it. Only that, it has nothing to do with cryptocurrency.

What do you mean to say mate, thats why it was called an stablecoin because it was backed or pegged by stable asset, such fiat, Gold sometimes its a Crypto with applied mechanism to stay in the stable value.  thats why it wont fluctuate as much like Ethereum or Bitcoin does, stablecoins has nothing to do with Ethereum it was just a trading relation on ETH BTC and other cryptocurrency in the market and it wont affect any volatility wethere it was Eth or Btc. crypto was based on supply and demand and nothing to do with the stablecoins.

I don't see any correlation between skyrocketing ETH prices and USDT. In my experience, the reference to up or down a coin or token is bitcoin. If Bitcoin goes up in price the others will also go up. No matter how many tokens there are under the aegis of ETH, it still cannot make the price increase in the market. In addition, many ERC20 tokens are only for profit or scam. In fact, this creates a bad image of ETH itself.

The word stable explains it already.
Yes it could be higher in demands but only in trading crypto currencies and not with investing with it.

That is one of their huge difference.
You can hold those stable coins until the next 20 years and nothing will change while on the hand it is the vice versa of Ethereum which have a lot of chance to gain a higher value once again.

I am still trying to figure out the correlation between stablecoins and Ethereum per say. You mentioned on your post that the higher the demand for stable coins, the higher the price of ETH, I don't think that's correct. If people are selling their ETH for stable coins on pairs like ETH/USDT or ETH/USDC for instance, it definitely implies they are taking profit or just trying to be on the safe side.

Maybe he was feeling confusing to see USDT is also used ethereum as the main pegged platform. that's why OP is thinking if this will give a huge impact to the ethereum but it's not. USDT and ethereum is not having correlation but bitcoin does. Remember there was a case about bitcoin already pumped by USDT. The impact caused by the pump of bitcoin will make the price of ethereum is increasing a lot.
that's why you will not see a direct impact from USDT to the ethereum

After reading your answer, I agree, very clearly, briefly and clearly explained everything, such information is useful to me to monitor the state of the market

There are many factors that affect the price of ETH and I think stablecoins will not have much impact, stablecoins play a key role as safe haven assets.

let's think in a holistic point of view, these stable coins are generally profitable if we are about to utilize it to many of cryptocurrencies in the market. Stable coins makes us safe from losses, in a way that it has a fixed market value. Maybe, what we can infer in this is that, since there is a stable coin, investment is much safer, and if investment is much safer, ethereum's and other crypto's market volume is higher, and if market volume is higher, there's a huge volatility in the market.

I think that ETH is not so much dependent on USDT as Bitcoin. Ethereum is more dependent on Bitcoin itself. the only way Ethereum is connected with USDT is if USDT has problems - Ethereum is growing in price

I think there is no connection between Ethereum price and stable coin like USDT.
Because the Ethereum price is not stable, peoples turn their ETH to USDT so their asset value will keep stable.
For me, ethereum price will goes down if there are high demand of stable coin because peoples will sell their ETH to buy USDT.

I can't seem to find any relation to this aspect. If stablecoin price goes up they depend on the value on which that coin is set. For example tether, we know its symbol is USDT, from the fact it is based on the value of thr USDT and serve as neutral coin so there is a neutralizer in the crypto market. If eth is going down then it's just mean no particular demand on the eth tokens that's why its plummeted.

Cryptocurrency experiences volatility due to demand and supply, it has nothing to do with stable coins. Then high demand for stable coins will not give you large fluctuations, because of their concept of stable coins. Those who carry the stable coin concept are not affected by extreme price volatility which is influenced by other cryptocurrency. And in my opinion about your opinion on high demand stable coin influencing ethereum is wrong.

Stable coins still affect the growth price of bitcoin and Ethereum, as people go to Fiat only in stable coins, and then again invest in these same currencies. Thus fluctuations in the purchase and sale occurs

I think that the presence of stable coins has a positive effect on the popularity of ethereum. At the same time, given that they use the ethereum network to a greater extent, this dramatically increased the load on the network. They call the figure a 40 percent increase in the load due to transactions with stable coins. Therefore, the scalability problem is more than ever before ethereum. Hope for upcoming improvements to this coin.

A stablecoin like Tether USDT has no impact over the Ethereum price. The Ethereum value is purely determined by market demand and supply. the stablecoins were invented to help mitigate loses during the correction period in the market. the stablecoins are U.S dollar equivalent and nothing more.  

The price or value of Tether has no impact over the eth price/value
Tether is developed to help curb to some extent or help control the % of loss.

Why is it possible to happen with ethereum? did you remember when stable coin like USDT has a lot of problem with the auditors to its reserved funds? it doesn't even give an impact to the price of ethereum.
I ask you how it is possible right now consider the USDT is much more affect the bitcoin rather than ethereum. I thought that you must learn more about how it works.

USDT become stable coin and ehereum lok not stable coin because ethereum have lower and higher price, USDT have change about several percent and ether could back lower and higher more than 50%, now bitcoin have down but for USDT keep stable with the same price at last years, for keep save investment assets without inflation and with risk you can hold and save your money with USDT but if you want get risk and big result you can invest with ETH.