A new horizon for stablecoin – experts predict a boom in the capitalization of stablecoin coins to as much as $3 trillion in the coming 5 years. This is also a very bullish signal for Bitcoin and altcoins, which with stablecoins have always shown a significant correlation.
Stablecoins will flood the market
According to an analysis by Bernsten experts, the stablecoin market is facing rapid growth, which could see it rise to as much as $3 trillion within five years. These forecasts assume that global financial powers and consumer consortiums will soon release their own stablecoins under a common banner, which will add momentum to these cryptocurrencies.
A twist characteristic of this trend will be the integration of digital assets with consumer platforms. This symbiosis will contribute to a “circular growth spiral.” Collaboration will allow stablecoins to expand their reach and popularity, even beyond their original platforms.
Analysts led by Gautam Chhugani point out that “global financial and consumer giants are likely to launch their own stablecoins to drive value transactions on their platforms.”
PayPal launches its own stablecoin PYPL
Barely a few days ago, the huge payments company, PayPal (PYPL), informed the world that it had created and issued its own stablecoin, pegged to the US dollar – PayPal USD (PYUSD). This is a significant signal for the market. The Ethereum-based coin will be available initially on PayPal and later on Venmo. Holders of the token will be able to exchange it for dollars at any time.
The Bernsten report also points out that stablecoin regulations are currently meeting with more political support than those for classic cryptocurrencies. Many jurisdictions, including Singapore, Hong Kong and Japan, are already implementing stablecoin and digital bank digital currencies (CBDCs) pilot projects, further boosting their future potential.
Stablecoin capitalization continues to fall
This fantastic news is at odds with the current state of the stablecoin market. Looking at the chart provided by the Looknode.com analytics platform, we can clearly see that the current capitalization of the four major stablecoins (USDT, USDC, BUSD and DAI) is less than $120 billion. Taking into account smaller coins with similar characteristics, the value is close to 125 billion. Thus, if the market clearly experiences an influx of capital, it could be a remarkable catalyst for an increase in the price of both Bitcoin and other crypto.