Bitcoin is Unlikely to Replace the Dollar Due to its High Volatility
The US Federal Reserve Chairman Jerome Powell believes that bitcoin, due to high volatility, will not replace the dollar, but can become a substitute for gold. In his opinion, bitcoin lacks many important elements that could make it a useful currency. First of all, bitcoin and other crypto assets are very volatile and unstable, so it is risky to consider them as a means of saving. In addition, transactions with crypto assets are more like speculation, since cryptocurrencies are not secured by anything. According to Powell, digital currencies are more likely to become a substitute for gold, but not the US dollar. At the same time, the head of the Federal Reserve called stablecoins an improved version of cryptocurrencies, since stable tokens are tied to fiat currencies, which ensures their relative reliability. The Fed chairman acknowledged that stablecoins can play an important role in the development of appropriate regulation. However, they will not be able to lay a solid foundation for the creation of a new international monetary system.
The market capitalization of stablecoins continues to grow, and the USDC remains one of the fastest-growing cryptocurrencies pegged to the US dollar. Currently, USDC tokens worth $ 10.3 billion are in circulation. Tether's market share is shrinking — it now holds 69.55% of the market. At the same time, USDC now occupies 17.05% of the market, while at the beginning of the year its share was about 14%. The shares of other stablecoins are also growing. The total market capitalization of stable cryptocurrencies is close to $ 60 billion. Earlier it was reported that approximately 70% of the total volume of stable cryptocurrencies circulates in the ethereum blockchain. The Tron network is also popular, where 26.6% of stablecoins are traded.