I've looked it up and get.thst stablecoins are often built on the ethereum network
I've googled, asked Grok but have not really found the direct tie between stablecoin adoption and the price of ethereum. I've got a little ETHA but just getting into the idea of it. Recent information, the genius act...etc is really hitting the news cycle
If stablecoin is pegged 1 to 1 with the dollar, how's that impact the price of ethereum
I'll write up a response when I have a little more time to do it justice.
The first thing is stable coins are not beholden to any particular chain. The cross chain infrastructure has really advanced in the last two years. So you can switch your stable coins from the ethereum network to the solana network pretty effortlessly and quick.
Another thing to note. Ethena USD(e) is backed by spot staked ethereum and short positions ethereum to keep the value of the collateral backing that particular stable coins relatively flat. (This is why in one reason there's a tremendous amount of short positions against ethereum). So this actually works against the price of ethereum.
A few reasons why it may/could/will:
1. As stable coins grow so does the liquidity within those ecosystem. And it stands to reason some of that liquidity finds it way into ethereum.
2. The Us government wants stable coins to increase because they are backed by short term US securities. So the money otherwise sitting all over the world in bank accounts is now going into buying US Debt. This will cement the US dollar in the digital age. And as such some of that liquidity will be in ethereum.
3 And this is maybe the biggest point. JPMorgan has been demoing intra bank transactions on blockchain.
Watch this 15 minute video of an internal presentation of what they're doing.
They have been testing intra bank transactions and tokenizing assets for four years with banks. Doing 2 billions in volume a day. They've explored private blockchain and that failed. So then they looked into a hybridization of a private and public chain. It looks like they have decided to go fully public. They are launching their intrabank deposit coin on base layer. Which is a layer 2 ontop of the ethereum network.
This will drive demand into ethereum into the billions of dollars of liquidity.
And as JPMorgan goes so too will others like blackrock.
Bonus not related to stable coins: blackrock is working on getting SEC approval to stake the eth backing ETHA to generate yield on the ETFs. Big time.
Second the inflows into ETHA are on the up and up.
I'm very bullish on JPMorgan first. ETHA next. CRCL and lastly COIN. With what we know today (black swans not withstanding) it's hard to come up with a better risk vs reward buy and hold to me then ethereum.
Last thought: I really haven't seen anyone talk about this in regards to JPM.
i think this is the same in video form. Here's tom Lee talking about stablecoins and Ethereum. Sounds like Ethereum draws a fee. I guess thats how ethereum trades at higher prices, for the fee to use the network?
Bitmine is up 300% today on the news that it is establishing an $ETH treasury.
Maybe. But I think his bigger point is the institutions that use the ethereum network will stake eth to secure the network.
What does staking ethereum mean exactly.
Im trying to figure out where the money flows to increase the price of ethereum for use in stablecoins specifically. And sense stable coins are pegged 1 to 1 to the dollar im left wondering how does this increase the price of ethereum
I understand not all stablecoins will use ethereum and that ethereum has other uses.
But for stablecoins on the ethereum network, how does that money flow to an investment in ethereum and cause the price 9f ethereum to go up
I also believe there's a strong chance stable coins serve as a national bail in mechanism. Bank dollars replaced with stable coins and those dollars go to buy treasuries to back the newly created stable coins. End user won't know a difference.
In this scenario the entire US financial system will be on ethereum. So it'd be a matter of national security for the US to accumulate and secure the ethereum network.
Ethereum in the premier blockchain for utility. It has longest standing time, it's the most secure, has the most liquidity, has the most applications etc.
If you're a bank and you're looking at it pragmatically ethereum blockchain is the obvious answer.
Interesting idea. When the transactions take an hour compared to ethereum or solana that take 1 second will be interesting to see the pivot. No reason to go to a volatile asset for that just for blockchain cross borders when USDC is available.
The funny thing is there's no reason to use SOFI for that either. The banks are realizing their control over money is fading fast.
They're not going to pivot, all those options are available today and they chose BTC. Security is more important to banks, institutions, and nation-states than how fast the transaction confirms.
The crypto investing platform is set to offer not only major digital currencies, but also broader features including staking, stablecoin access, and crypto-collateralized lending. In addition, Galileo, SoFi's tech platform, will expand crypto-related infrastructure services to outside companies, bolstering SoFi's ecosystem reach.
Regulatory positioning is also in SoFi's favor, following new guidance in interpretive letters 1183 and 1184 from the Office of the Comptroller of the Currency. The national bank charter held by SoFi Bank, N.A. permits custody and execution of crypto, stablecoin reserve holdings, and select blockchain-based payments, further entrenching SoFi's hybrid financial model
I'm definitely not doing that at all, ETH is not secure or decentralized. Not going to get into a big thing about it but make no mistake, it is a ****coin.
First let me say I think you're a pretty intelligent person and I almost always enjoy reading your posts. However on this particular point I think you might be a little off base. Bitcoin has been well adopted as "digital gold". But just like gold sits in vaults and on balance sheets so does bitcoin. It sits in wallets and on balance sheets. Earning nothing and provides no utility. Compared to other blockchains that provide utility and earn yield.
Fundamentally to me they aren't even in competition. Btc and eth are two separate things and in my mind both good. And I think we are seeing that mentality beginning to be adopted at the institutional level.
What's preventing JPM or some other institutional entity from copying ETHs code and doing their own version? Put themselves, instead of Vitalik, at the top.
I'm pretty sure the answer is "nothing" now that the PoW incentive structure has been removed.
I thibk no matter what you invest in there's always that risk. That someday someone or something will replace what you're invested In. Someone can go make a PoW too. There's ethereum classic which is PoW. The problem isn't being able to make a blockchain it's attracting the users and liquidity and the developers who make the things people use.
JP Morgan has spent the last four years demoing a private blockchain they own and run. They concluded it's worthless and so they then explored doing a hybridization of public/private. But now it seems they have settled on just using ethereum.
And if you listen to Tom Lee he is saying they will just absorb tbe eth supply to control the network.
Just to reiterate this isn't a discussion of narratives or future possibilities. This is happening in real time. The US government NEEDS stable coins to become even more proliferated. The genius act by all accounts will get signed in a couple of weeks. JP Morgan and others like SOFI are bending the knee to crypto finally after having been so opposed. Banks NEED to adopt stable coins too. So we JP Morgan moving that direction on ethereum.
US dollar dominance in the future also depends on this. Which is why Trump is so pro crypto.
I really do not believe the market at large has come to terms with what's happening.
Has anyone watched that video I posted? I've been following this stuff for awhile now and keeping an eye on JP on which direction they would ultimately go.
Yes, anyone can copy the code of Bitcoin or another PoW chain. I strongly disagree with the suggestion that the ease of operating and ramping up a PoW chain is the same as PoS.
The fact that one must expend significant resources(acquire miner hardware, kWh to power the miners, etc) to generate the coin on a PoW model is a strong disincentive to creating pointless ****coins that have little chance of being adopted by the masses.
In contrast, Ethereum and other coins using a PoS system can create a new billion coins out of thin air at any time without much/any additional Op/Capex.
The odds of seeing a copy cat of a PoS coin seems significantly higher than on something like Bitcoin.
You can make and run a PoW blockchain with a single laptop. The start up is inherently no different to a PoS. Bitcoin was originally being ran by a single computer.
But I do agree the likely hood of a future PoW blockchain is slim albeit not impossible. Which is also why it's a bit sad btc maxis have been such a stumbling block for development on the btc blockchain.
But ultimately none of that matters for the discussion at hand which is specifically about stable coins. Are there stable coins on the bitcoin blockchain?
I ultimately think people need to separate the bitcoin vs eth discussion in their minds. It's been a point of internet banter for a decade now and there are extremely entrenched positions. Both financially and emotionally.
I'm indifferent to which blockchain succeeds. I only want to have financial upside exposure to it. Currently the Us government IMO is realizing the future for the dollar and debt management is through stable coins. Simultaneously banks are realizing technologically they will be surpassed if they don't own offer access to the blockchain infrastructures and stable coins.
And so I see the two biggest financial players converging on wanting stable coins to have a prominent future. And currently most of that liquidity resides on the ethereum network. So a very pragmatic investment look to me says ethereum is undervalued.
Ethereum in the premier blockchain for utility. It has longest standing time, it's the most secure, has the most liquidity, has the most applications etc.
If you're a bank and you're looking at it pragmatically ethereum blockchain is the obvious answer.
Not even close to accurate. Cardano is the most secure, reliable, and decentralized. Zero down time in 7 years and zero hacks. Ethereum is more expensive to use and has foundational tech holes. If you are bank you don't want to put The Club on the vault. Cardano's academic rigor is what banks and governments will need.
Ethereum in the premier blockchain for utility. It has longest standing time, it's the most secure, has the most liquidity, has the most applications etc.
If you're a bank and you're looking at it pragmatically ethereum blockchain is the obvious answer.
Not even close to accurate. Cardano is the most secure, reliable, and decentralized. Zero down time in 7 years and zero hacks. Ethereum is more expensive to use and has foundational tech holes. If you are bank you don't want to put The Club on the vault. Cardano's academic rigor is what banks and governments will need.
Ethereum in the premier blockchain for utility. It has longest standing time, it's the most secure, has the most liquidity, has the most applications etc.
If you're a bank and you're looking at it pragmatically ethereum blockchain is the obvious answer.
Not even close to accurate. Cardano is the most secure, reliable, and decentralized. Zero down time in 7 years and zero hacks. Ethereum is more expensive to use and has foundational tech holes. If you are bank you don't want to put The Club on the vault. Cardano's academic rigor is what banks and governments will need.
Good! I am increasing ADA hodling. For now, I'm large majority ETH, increasing ADA and starting bag with XLM.
Ethereum in the premier blockchain for utility. It has longest standing time, it's the most secure, has the most liquidity, has the most applications etc.
If you're a bank and you're looking at it pragmatically ethereum blockchain is the obvious answer.
Not even close to accurate. Cardano is the most secure, reliable, and decentralized. Zero down time in 7 years and zero hacks. Ethereum is more expensive to use and has foundational tech holes. If you are bank you don't want to put The Club on the vault. Cardano's academic rigor is what banks and governments will need.
Good! I am increasing ADA hodling. For now, I'm large majority ETH, increasing ADA and starting bag with XLM.
XLM and DOGE were two altcoins that got me acquainted with crypto. I liked the XLM project and DOGE was something fun and popular. They were cheap and I didn't want to make any huge mistakes while learning crypto. I did manage to blackhole a $100 XLM transfer to my wife. I tried to get it back for a couple of weeks then chalked it up to lesson learned.
Man, I've been holding XLM for like 4 years, and I've only lost half my money in it. Is it expected to take off again? I also had my ADA value cut in half since then. I shouldn't have bought when all these alt coins were peaked in 2021. However, I'm still adding to ADA to bring my DCA down since it is in slump. I actually believe in ADA as a product, but I'm not so sure about XLM anymore.
