Cryptocurrency
Stablecoins Will Do More Than Just Reduce Crypto Price Volatility via @coindesk
As written by Bill Barhydt and reported by Coindesk, “There are plenty of misconceptions surrounding stablecoins. One of the main things that I hear frequently is that they will somehow bring the volatility of current crypto markets to heel. “Maybe this is implied by the name, or maybe it’s just a misunderstanding of crypto market dynamics […]
As written by Bill Barhydt and reported by Coindesk, “There are plenty of misconceptions surrounding stablecoins. One of the main things that I hear frequently is that they will somehow bring the volatility of current crypto markets to heel.
“Maybe this is implied by the name, or maybe it’s just a misunderstanding of crypto market dynamics when compared to other more traditional financial markets, but stablecoins by themselves won’t smooth the turbulent fiat value of crypto assets. Only a massive amount of liquidity in the crypto space and a significant amount of time will do that.
“Instead, stablecoins will have a role to play in broadening cryptocurrency markets. In my mind, the most promising and often overlooked application for stablecoins is their utility as on-ramps for assets moving from traditional financial markets into crypto.
“I like to use the analogy that if cryptocurrencies are like the Matrix – a digitally-native technology that is completely apart from the physical world – then stablecoins can be like the hard line between these two worlds. In this case, the hard line would exist between the new world of computer-code-based value, e.g. bitcoin, and the traditional value system based on physical assets, e.g. fiat or the U.S. dollar.”