On-chain researcher SMQKE has issued a provocative prediction: the potential dominance of XRP and its associated stablecoin, RLUSD, following a collapse of what he terms the “Tether bubble.” This assertion is rooted in concerns about the stability of Bitcoin and Ethereum, which he believes rely on Tether’s liquidity.
Recent data from Lookonchain supports SMQKE’s concerns. Tether has been aggressively expanding its supply, minting over 3 billion dollars a couple of hours ago. This rapid growth has fueled speculation about the true backing of these newly minted USDT coins.
Correlation Between Tether Liquidity and Bitcoin’s Price
SMQKE argues that Tether’s actions could artificially inflate the prices of Bitcoin and Ethereum, creating a speculative bubble. This assertion is corroborated by research from institutions such as the Bank of France, which has identified a strong correlation between Tether’s liquidity and Bitcoin’s price.
However, SMQKE believes that this bubble is unsustainable. He warns that a market correction could occur if investors become aware of potential shortcomings in Tether’s backing. Such a correction could have severe consequences for Bitcoin and Ethereum, potentially shaking investor confidence in the broader cryptocurrency market.
XRP and RLUSD: A Stable Alternative
In contrast to the perceived instability of Bitcoin and Ethereum, SMQKE highlights XRP as a more stable alternative. XRP has demonstrated resilience, particularly in its use case for cross-border transactions and its commitment to regulatory compliance.
Furthermore, Ripple’s upcoming stablecoin, RLUSD, is poised to offer a more regulated and transparent alternative to Tether. Unlike Tether, which has faced criticism for its lack of transparency and regulatory challenges, RLUSD is expected to comply with stringent regulations, ensuring that it is fully backed and transparent.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
SMQKE suggests that the introduction of RLUSD, combined with Tether’s regulatory uncertainties, could lead to a significant shift in market dynamics.
Investors may prefer the stability and security offered by a regulated stablecoin, potentially reducing Tether’s market dominance. This could benefit XRP, as it is not as heavily intertwined with Tether’s potential vulnerabilities.
While the future of the cryptocurrency market remains uncertain, SMQKE’s analysis suggests that XRP and RLUSD could be well-positioned to benefit from a potential collapse of the Tether bubble.
The stability, regulatory compliance, and innovative use cases of these assets could make them attractive alternatives to Bitcoin and Ethereum, particularly in a market characterized by uncertainty and risk.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
Follow us on Twitter, Facebook, Telegram, and Google News
This news is republished from another source. You can check the original article here
