Market Overview

FxPro: Stablecoins as new crypto market trend

As the Bitcoin continues to trade sideways near $6,300, leading commentators declare they are “pleasantly surprised” with the market stability simultaneously changing their forecasts from “20k per BTC” by the end of 2018 to another 18 months of a bearish trend (BitMEX). It seems that now it is really very difficult to determine the future market direction given the weak reaction to the news background, as well as the lack of correlation with stock market which lost about 9% in October.

Stablecoins can be new crypto market triggers as recently they have been actively gaining capitalization and has grown numerically. There is no common opinion in the crypto community regarding this process. While Tether lost about $1 billion of capitalization only in October, Gemini Dollar (GUSD), Paxos Standart (PAX), TrueUSD (TUSD), USD Coin (USDC) all together attracted more than $400 million. Different large projects are standing behind these tokens, but overall they may have one goal: to have at their disposal the “manual analogue of digital liquidity” in order to be able to influence the market in future. As of Tether, the experts and crypto community suspect that USDT was used to “pump up” the market, which also contributed to the explosive growth of cryptocurrency in the end of 2017.

The experts also suggest that the BTC flat dynamics may be associated with the USD stable positions and if the prospects for main reserve currency will change due to potential effects of a trade war p, the benchmark cryptocurrency can benefit from it. The BTC price dynamics can also be influenced by emerging markets movement, which together with cryptocurrencies showed highs at the beginning of the year and then moved into the downtrend phase.

The launch of the Bakkt and Fidelity platforms in the near future, which will allow institutional investors to buy and store safely cryptocurrencies, is also considered as a very strong news trigger. On the one hand, the market perceives this news with hope, on the other hand, with a great deal of apprehension recalling how the launch of the Bitcoin futures last year had influenced the market dynamics. Nevertheless, this time everything may be different due to a change in the attitude of Wall Street towards the cryptocurrency.

Fundstrat Global Advisors analyst Tom Lee conducted a survey among 25 Wall Street companies on his Twitter account and 44% of the respondents said that the BTC had already reached its minimum point. So the launch of new tools can help rather than harm future prospects of the crypto market.

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