Success for crypto will be bitcoin losing its crown to a stablecoin?

[Swapzone_pr]

The founder of the Avalanche network, Emin Sirer, claims that the “reasonable” value of stablecoins will give them an edge over other cryptocurrencies. He believes that we will not complete the formation of the crypto market until stablecoin becomes the number one coin, that is, the first sign of the massive success of cryptocurrencies will be the fact that any stablecoin will overtake Bitcoin and become the leading digital currency.

It's understandable cause apart from being able to stabilize price volatility, stablecoins are also supported by multiple sources of assets. It could be a traditional currency like the US dollar, commodity, precious metals, or algorithmic functions, or other cryptocurrencies.

However, the risk level for stablecoins is greatly influenced by its backing, so isn't that a "too much" claim?

https://markets.businessinsider.com/news/currencies/avalanche-avax-emin-guen-sirer-founder-bitcoin-stablecoin-tether-usdc-2021-10

https://swapzone.io/blog/stablecoins

[pooya87]

You can never compare apples and oranges. You have to compare things that are in the same category. So when you are comparing centralized tokens you have to compare them with their similar centralized tokens for example compare a stablecoin with PayPal and see which one is on top and whether the stablecoin can overtake PayPal or not.

If some day someone could invent a new technology that could ensure decentralization while having a stable value then it has a pretty good chance of replacing bitcoin. But I don't believe such a technology is even possible because of how economics work. And until then what we have are centralized, premined, mutable semi-stable coins that can't even come close to bitcoin in terms of usage let alone want to compete with it.

Besides, bitcoin value will eventually stabilize after reaching mass adoption and growing to its true potential which makes the idea of using a centralized stablecoin moot.

The founder of the Avalanche network,

That is the founder of a centralized platform with a massive premine and a fundraising of about $200 million by dumping those premined AVX tokens.

[avikz]

Lol! Cryptocurrency market is a parallel ecosystem so it absolutely makes no sense to replicate the mainstream economic structure into the crypto market. Stablecoins are definitely needed but no so much that it overtakes bitcoin. Crypto market is all about free market where the price of an asset is driven by the market demand. Whereas stablecoins are driven by the value of its underlying assets.

In my language, we have a saying that - Baap baap hota hain!

Bitcoin will remains as the Baap of all cryptos till the time cryptos remain alive. Doesn't matter what the founder of a centralized currency thinks!

[Mbitr]

[mk4]

However, the risk level for stablecoins is greatly influenced by its backing, so isn't that a "too much" claim?

Fun fact: Most people don't even know the risks of centralized stablecoins. Most think that it's a token hence it's somewhat trustless despite being centralized. They have no idea that the stablecoins can get frozen on their wallets.

As for a stablecoin overtaking bitcoin, yea I wouldn't be surprised to be honest. But bitcoin getting kicked out of the #1 spot doesn't make it less good. Doesn't change anything.

[SquirrelJulietGarden]

The most important characteristic of a good cryptocurrency is decentralized. Bitcoin has it from the beginning and maintains it so far.

Altcoins are abundantly on the market but they are centralized in their core developer teams. Stable coins are mostly centralized too. Do you really think stable coins are really stable? Most of them peg with fiat and this approach does not help them to be really stable. If fiat lose their value by hyper inflation, stablecoin pegged by fiat will lose their value at the same rate or worse.

[pawanjain]

Stablecoins will never make it to the top. I would rather hold my bitcoins and wait for it to appreciate than hold stable coins and get nothing in return.
This is the principle why many would hold an appreciating asset making bitcoin stay on the top until any other appreciating coin takes it's place.
Stable coins might make it to the top temporarily for example in a bear market but in the long run bitcoin will remain in the #1 position.

[Ararbermas]

Stable coins is so stagnant, i don't know if it's possible or how is that possible to happen wherein even its so obvious that bitcoin is so expensive and very high than other assets.. Infact bitcoin price is almost near at the price of silver in the market and only stablecoins can over take in it? Lol i prefer to hold bitcoin no matter what happen. Because to be honest it like your dumb holding a very stagnant asset..

[Ozero]

I don't think stablecoins should even be counted as cryptocurrencies. In most cases, these are only digitized currencies of states. They have a generally stable value and it is unlikely that we will see that bitcoin, for example, will cost less than one dollar. Therefore, the logic of this reasoning is completely incomprehensible to me. Stablecoins will never play a dominant role among decentralized cryptocurrencies.
This will be especially noticeable when states also issue their stablecoins from central banks.

[fiulpro]

Let's talk about stable coins.
- Their value is backed up by another asset
Which does mean there is a scope for growth, there is a much less scope for crashing but at the same time there is literally no scope for this much volatility that bitcoins shows.

From 25k to 75k in a year, this sounds not only unrealistic but it's also amazing since it's coming from a market affected by COVID-19 undoubtedly.

For me bitcoins would be the top for sure because unlike bitcoins stable coins gives less returns and let's be clear on it, the third party is not really something we can push out of the picture.

So how would an asset dependent upon another asset, controlled by third party, giving way less returns and less volatile as well take over bitcoins?? That's my question.

[DooMAD]

Stablecoins are the very definition of an IOU.  It only exists to represent something else.  It barely even qualifies as crypto in my mind.  I'd argue that more people embracing IOUs is wholly antithetical to success for crypto and that this Emin Sirer character might be a bit of a pillock.

[aprilnot]

sadly it's hard to come true. it is very unlikely to shift bitcoin now or later. stablecoins may be good, but the goal of people in crypto is profit. they say adoption and so on, but their main goal is profit. if stablecoin is number one, it means that market volatility is gone. the market becomes stable and it is difficult to profit from such a situation. so if choosing which one is the best, everyone will vote bitcoin must remain number one.

[michellee]

I do not think banks will die in 5-10 years later as the banks are one product from the government. The government does not want to see their product will die and will do many things they can to still exist among the people. Maybe the government will modify the system and who knows, the government will try to integrate the system with the blockchain so the banks can evolve into the blockchain.

If the government allows people to use crypto and make sure the banks still exist, people will have the freedom to manage their finances and not just depend on the banks.

[mk4]

I don't think stablecoins should even be counted as cryptocurrencies. In most cases, these are only digitized currencies of states. They have a generally stable value and it is unlikely that we will see that bitcoin, for example, will cost less than one dollar. Therefore, the logic of this reasoning is completely incomprehensible to me. Stablecoins will never play a dominant role among decentralized cryptocurrencies.
This will be especially noticeable when states also issue their stablecoins from central banks.

I'm pretty sure Emin Sirer was referring to stablecoins overtaking bitcoin in terms of either marketcap, or transaction usage. It would be exceptionally dumb to actually expect bitcoin to drop below a stablecoin in terms of unit price($1) lol.

[coco23]

Stablecoins are the very definition of an IOU.  It only exists to represent something else.  It barely even qualifies as crypto in my mind.  I'd argue that more people embracing IOUs is wholly antithetical to success for crypto and that this Emin Sirer character might be a bit of a pillock.

Yea I also would not consider Stablecoins as a "pure cryptocurrency". Stablecoins will always need some underlying asset which probably is managed in a central manner. Actually it is pretty odd that they appear in rankings such as CMC... 

[rhomelmabini]

At least the title was still a question and the thing is "it won't". I think Sirer was totally defining Bitcoin losing in terms of its market cap. To be perfectly honest, it's not impossible if they could print billions weekly, e.g. USDT.

[SlimShadyMmp]

As far as crypto remains I think BTC will continue to grow more steadily and its just the backbone of digital currency with decentralization and value giving to it by demand and supply The more users which will definitely not cease the more use case you get

[Sanitough]

Bitcoin is successful because people are investing in it, so how can people choose a stablecoin over bitcoin when they can't invest in a stablecoin.

The difference is huge, bitcoin = decentralized, while stable coin = centralized.
In fact, in the early days of crypto stablecoin is not yet created so it will not change the reality that crypto should be lead by decentralized currencies not a stablecoin.

[tvplus006]

...However, the risk level for stablecoins is greatly influenced by its backing, so isn't that a "too much" claim?

In the event that the stablecoin is issued by the national bank of a country with a developed economy, the risks will be practically reduced to zero. In this case, the stablecoin will in fact be just another form of the national currency and, accordingly, the risks will be the same as those of fiat.

[mk4]

Yea I also would not consider Stablecoins as a "pure cryptocurrency". Stablecoins will always need some underlying asset which probably is managed in a central manner. Actually it is pretty odd that they appear in rankings such as CMC... 

It actually makes sense. When picking a stablecoin to either hold or trade, you'd check which stablecoin has the highest trading volume because stablecoins that have higher trading volume tend to be less volatile or more "stable". You can actually sort using the column: