If you’re a fan of cryptocurrency you will know that last year stablecoins had a tremendous surge in popularity and they finished the year in a very strong position, especially against the backdrop of non-stable cryptocurrencies.
It goes without saying then that 2020 should be a very positive year for stablecoins but it won’t be without challenges. Here are the key things to watch out for if you are rooting for stablecoins.
Ripple Won’t Go Down Easily
One thing you may have noticed in the crypto charts is that stablecoins like Tether and USDC which are both backed supposedly (more on this later) by the US dollar have crept up the rankings quite quickly. In fact, Tether is currently pursuing Ripple for third spot which is no mean feat given how fresh it is to the market.
One thing you can guarantee though is that Ripple will not cede its top three position easily and you can expect some pretty aggressive moves by Ripple to cement their place. Tether vs Ripple will start to really hot up as 2020 ends so keep an eye throughout the year as this battle begins to unfold.
Stablecoins Still Have a Lot to Prove
If competition with traditional cryptocurrencies wasn’t enough, stablecoins have a lot of blind confidence at the moment that is being eroded. Essentially, investors trust the developers to hold stockpiles and trust that developers are telling the truth about the amount of money or assets they have stockpiled.
While the big stablecoins (although under heavy scrutiny) have so far steered clear of too much controversy, it is worth noting that some asset backed coins and stablecoins have turned out to be outright frauds. With stablecoins looking to build a stable and trustworthy cryptocurrency market which is free of volatility, the developers of coins like Tether and USDC might soon have to disclose in full exactly how much they’re holding in reserve.
Especially if the US regulators get their way – which they often do.
All Being Well – Stablecoins Could Have A Bumper 2020
Unlike other cryptocurrencies that have a somewhat gloomier outlook, most stablecoins have a very rosy outlook and providing that things keep developing as they have done so far, they could finish 2020 on a huge high.
In this respect, stablecoins represent a very positive force in the cryptocurrency world – one that is trying to alleviate investor concern as well as challenge the status quo. This means that traditional cryptocurrencies like Ripple, Bitcoin and Ethereum are being kept on their toes which makes for a more competitive and dynamic marketplace.
2020 could beckon in a more welcoming and open market where coin prices are not defined by the performance of major cryptocurrencies (Bitcoin) and with stablecoins proving so popular, they could give investors the much-needed respite from the chaos of traditional crypto trading.
Where most traditional cryptocurrencies are struggling to gain momentum, stablecoins are riding a wave of momentum that hasn’t yet crashed. So far, so good for stablecoins.