On-chain researcher SMQKE has made a bold prediction, asserting that XRP and its associated stablecoin, RLUSD, could become dominant following a collapse of the “Tether bubble.” This prediction is based on concerns about the stability of Bitcoin and Ethereum, which SMQKE believes are heavily reliant on Tether’s liquidity.
Recent data from Lookonchain has added weight to SMQKE’s concerns. Tether has been aggressively expanding its supply, minting over 3 billion dollars in a short period, raising questions about the true backing of these newly minted USDT coins.
Tether’s Impact on Bitcoin and Ethereum
SMQKE argues that Tether’s actions could be artificially inflating the prices of Bitcoin and Ethereum, creating a speculative bubble. This assertion is supported by research from institutions like 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 and warns of a potential market correction 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 as Stable Alternatives
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.
Ripple’s upcoming stablecoin, RLUSD, is also 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.
Also Read: XRP & RLUSD Set To Dominate- SMQKE Predicts 30% Market Shift Post-Tether Collapse
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: 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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