In the ever-volatile world of cryptocurrency, a bold prediction by on-chain researcher SMQKE is making waves. He suggests that XRP and its associated stablecoin, RLUSD, could emerge as dominant forces in the market, especially if the so-called “Tether bubble” bursts. This provocative view is rooted in growing concerns about the stability of Bitcoin and Ethereum, both of which SMQKE believes are heavily reliant on Tether’s liquidity.
The Tether Dilemma – A Bubble in the Making?
Tether, the most widely used stablecoin, has been under scrutiny for years. Recent data from Lookonchain has intensified these concerns, revealing that Tether has minted over $3 billion worth of USDT in just a few hours. This rapid expansion has led to speculation about the actual backing of these newly minted coins, with critics questioning whether Tether truly has the reserves to support its supply.
SMQKE argues that Tether’s aggressive supply increase could be artificially inflating the prices of Bitcoin and Ethereum, creating what he describes as a speculative bubble. His concerns are not unfounded—research from the Bank of France has identified a strong correlation between Tether’s liquidity and Bitcoin’s price movements. If Tether’s backing is called into question, a market correction could ensue, potentially leading to a significant decline in the value of Bitcoin and Ethereum.
XRP and RLUSD But A Stable Alternative?
In contrast to the perceived instability of Bitcoin and Ethereum, SMQKE highlights XRP as a more resilient and stable option. XRP has already proven its worth in cross-border transactions, where its speed and low cost have made it a popular choice. Moreover, Ripple, the company behind XRP, has been proactive in its commitment to regulatory compliance, further bolstering its credibility.
Adding to XRP’s appeal is Ripple’s upcoming stablecoin, RLUSD. Unlike Tether, which has faced criticism for its lack of transparency and ongoing regulatory challenges, RLUSD is expected to be fully backed and compliant with stringent regulations. This transparency and security could make RLUSD an attractive alternative for investors seeking stability in the volatile crypto market.
The Implications of a Tether Collapse
Should SMQKE’s prediction come to pass and the Tether bubble bursts, the ripple effects could be profound. Bitcoin and Ethereum, both of which have been buoyed by Tether’s liquidity, could see a sharp decline in value. This could create an opening for other cryptocurrencies, such as XRP, to gain market share.
RLUSD, with its regulated and transparent backing, could also emerge as a preferred stablecoin, particularly if Tether’s credibility continues to be questioned. Investors may gravitate toward RLUSD’s security and stability, further reducing Tether’s dominance in the market.
Also Read: XRP Faces Crucial Test – Can It Hold the $0.595 Support Level?
A New Era for Cryptocurrency?
While the future of the cryptocurrency market remains uncertain, SMQKE’s analysis offers a glimpse into a possible shift in the landscape. XRP and RLUSD could be well-positioned to capitalize on any weaknesses in Tether’s foundation, offering investors a more secure and reliable alternative.
In a market characterized by volatility and risk, the stability and regulatory compliance of XRP and RLUSD could make them the go-to choices for investors, potentially ushering in a new era for cryptocurrency.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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