Stablecoins on Verge of Beating Visa in Volume: How Will It Affect Bitcoin?

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As a researcher with a background in finance and experience in following the crypto market closely, I find the meteoric rise of stablecoins to be both intriguing and significant. The projection that they will surpass Visa’s total payments volume by Q2 2024 is a testament to their growing influence in the global payments landscape, particularly within cryptocurrency trading.

Since 2017, the growth of stablecoins has been extraordinary, and it’s projected that they will surpass Visa’s total payment volume by as early as the second quarter of 2024. This upcoming achievement highlights the increasing impact of stablecoins in the global payments system, particularly within cryptocurrency markets.

Stablecoins have been rapidly gaining ground as a formidable competitor to Visa in terms of payment volume, particularly in the realm of cryptocurrency trading. Approximately 90% of stablecoin transactions can be linked back to trading-related activities. A significant portion of these transactions is attributed to wash trading, which artificially boosts trade volumes through synchronized and prearranged buying and selling practices.

Experts predict that stablecoin transactions will surpass Visa’s payment volume by Q2 this year. But have you ever pondered over where the majority of these transactions originate or what their primary uses are?

— Turner Novak 🍌🧢 (@TurnerNovak) May 5, 2024

As a crypto investor, I’ve noticed that the widespread adoption of stablecoins in the trading sector can make direct comparisons of their volume with traditional payment networks like Visa misleading. This is because stablecoins mainly serve to facilitate retail and commercial transactions within the crypto ecosystem. In a blog post, Visa acknowledged this utility, explaining that stablecoins are currently primarily used for smooth and efficient conversions between various cryptocurrencies within the digital asset marketplace.

Despite the challenges, the massive amount of transactions processed by stablecoins is noteworthy. At present, these digital currencies manage a staggering volume of $265 billion and serve an engaged user community of 27.5 million monthly active users (MAUs). This translates to an average of around $9,600 in transaction value per MAU.

As a researcher studying the cryptocurrency market, I’ve observed that Tether’s market capitalization currently hovers around $110.86 billion, indicating significant expansion within this sector. The increasing usage of stablecoins, primarily for trading activities, hints at a larger acceptance and potential integration into traditional financial systems in the future.

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2024-05-05 15:52