Will the increasing use of stable coins boost Bitcoin price eventually?

[Bossian]

Hi,

Just some thoughts that crossed my mind, and a question.

In my personal life, I work in a certain field and we often look for payment processors. My boss recently found a new processor to accept payments by credit card (Visa and Mastercard). This processor uses cryptocurrencies, it is an intermediate so that our customers can pay on our website (won't disclose the name of the processor).

Anyway, when our customers want to pay, for example 100 EUR, they want their wallet to be topped up as quickly as possible, and most importantly without any variation in the price (some of our customers are not even aware they are officially buying cryptos).

Sad to say, but my boss quickly opted out of using Bitcoin, for obvious reasons:

• price volatility during the transaction
   

• transaction not instant: requires at least 20 minutes

Both weaknesses are linked, an instant transaction would prevent any volatility.

Our customers don't want to pay 100 EUR and get only 98 EUR in their wallet.

So my boss thought about using XRP... then found out the processor also offered the possibility to use Tether. So in the end we just decided to use USDT. It was an obvious and natural choice.

Now, let's be honest, 99% of merchants in this situation would do the same, and 100% of them would choose another coin over Bitcoin.

Stable coins will be massively used in the future for practical reasons. Bitcoin? I don't see how to make a case for Bitcoin here.

But could the increasing use of stable coins boost Bitcoin price, somehow? It would make no sense, but since the crypto world often makes no sense it could be worth discussing this question here      

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[Cnut237]

This is a difficult question, because crypto is under continuous development, and use-cases can change.

Yes, right now, you wouldn't use Bitcoin for an instant, low-fee money transfer. However we do have developments such as LN, which demonstrate that bitcoin can offer these solutions. Bitcoin doesn't stand still. As crypto and bitcoin in particular grow in size and start to become integrated with the mainstream economy, new problems will present themselves, and new solutions will be developed in response.

But bitcoin isn't a one-stop-shop that covers every crypto use-case. The question of what bitcoin's role will ultimately be is open to question. Will it become digital gold, a store-of-value use case? Perhaps.

I understand bitcoin maximalism, but in many areas of life zealotry and absolutism are not the most productive approach. Are there other crypto options that offer faster cheaper payments than bitcoin does? Yes. Each has its pros and cons. Tether for example has been embroiled in controversy, so is not necessarily the perfect option... but then nothing is the perfect option, that's the point. You pick and choose from what is available, making an educated choice.
Stable digital payments? Tether is a solid choice. You mentioned XRP, which is a great choice if you want to transfer between currencies. Maybe you want to automate some manual process using crypto, in which case you'd use a smart contract coin, most likely Ethereum. Bitcoin though? It's the original coin, still by far the biggest, still the safest (excepting stable coins) against sudden price drops, still the most solid bet for price increases... but it's not the best fit to all circumstances.

I firmly believe that crypto will transform society, and also that there will be roles for many coins. Bitcoin will likely always remain the biggest and best, but other coins can and will be a better choice for other roles.

As for the question of whether increasing use of stablecoins will boost bitcoin's price, I would say this is likely, yes, in that increasing adoption of any form of crypto will boost the whole market.

[Goodvalony]

Nope it will not  help bitcoin rather improve cryptocurrency usage as a solid means to pay for services rendered. it will increase adoption. bitcoin usage might reduce. i don;t think it will have any ample effect or any damaging effect on bitcoin. also liquidity is not effective on Stablecoins but control and control might be problematic.

[palle11]

Nope it will not  help bitcoin rather improve cryptocurrency usage as a solid means to pay for services rendered. it will increase adoption. bitcoin usage might reduce. i don;t think it will have any ample effect or any damaging effect on bitcoin. also liquidity is not effective on Stablecoins but control and control might be problematic.

I think if it leads to adoption of cryptocurrency or its growth, it means that bitcoin too will grow exceedingly in value as we all see it that bitcoin is the leading cryptocurrency except you think bitcoin will reduce from number one.

[TheUltraElite]

It is wrong to think that bitcoin is less "usable" because it is volatile. Every trade-able asset is volatile by nature. It is an inherent property due to secondary markets that trade it and thus is a necessary evil. Think of the days when gold was used to barter, since it did have any secondary market at that time it was considered absolute but with development of civilization it no longer remained so.

What that behind us, we are already using something like a stable-coin for daily necessities which is just known as fiat currency. That too is not completely stable because it is again exchanged by foreigners and have a fluctuation on its markets but not inside the country.

Now coming to what merchants can do, they are not going to sell items that are priced in the values of millions such that even a 1-5% swing would cause massive changes in price of the article. If they are such a merchant then its different but of course your local grocery store does not fall under them.

If we think is this more practical and less conspiracy theory manner then it makes sense. However I have noticed a continuous low key attempt of stablecoin shilling in this forum which needs to be busted soon.

[Cnut237]

we are already using something like a stable-coin for daily necessities which is just known as fiat currency

I think this is a bit circular. Stablecoins are pegged to fiat. They are just a bridge between fiat and crypto. When something is described as a stablecoin, it is stable relative to another source of value.

It is wrong to think that bitcoin is less "usable" because it is volatile.

Volatility is not a property of bitcoin, it's a property of the current crypto markets. In terms of global finance, crypto markets are young, immature, low volume, and unregulated. This makes them prone to volatility due to speculation and manipulation. This volatility is self-perpetuating because of its own history. We are all well aware of say the 2018 bear market. Every minor price fluctuation triggers FOMO or panic-selling, which amplifies the original movement.
As the markets mature, as volumes increase, and as we move towards the mainstream and encounter legislative standards such as KYC and AML measures, then the volatility will decline.
Bitcoin can be the ultimate store of value, stateless, decentralised, uncorrelated (or negatively correlated) to real-world assets. The current volatility means that the idea of Bitcoin as a store of value is laughed off by short-sighted loud-mouthed idiots in the media who confuse current-state with end-state. We are nowhere near end-state.