• As Ethereum 2.0 looms, smart contract deployments on the network approach 2 million
  • New study dismisses Tether’s alleged role in Bitcoin manipulation

After yesterday’s push to above USD 7,500 Bitcoin price continues to trade in that range on the start of the weekend, and Bitcoin bulls will be looking at Monday to see if any extra clues will surface as to the fate of the markets with halving due on 12 May 2020.

We focus today on some recent news which underlines the bullishness of the overall crypto industry, amid this Bitcoin price recovery we are currently experiencing.

The first pick is a piece of really optimistic fundamentals regarding the world’s largest cryptocurrency behind Bitcoin, the smart contract platform Ethereum. With last week showing the world its intent on being the leader of altcoins and decentralized applications (Dapps) for years to come with the testnet release of ETH 2.0, we now see also that deployments of smart contracts on the network are now almost three times as many as last month, now touching 2 million — all this while costs are at historical lows.

Ethereum is one of the oldest altcoin networks in existence, and was the popular go-to network for the age of ICOs in 2017 thanks to easy and seamless deployments of smart contracts and tokens, but has often been criticized for its perceived inability to scale and with fewer options than more modern iterations of similar concepts, such as those like TRON and EOS, both of which offer cheaper transactions and faster speed.

In August last year, Blockstream CSO Samson Mow even dismissed the project as a “technological dead end”, as developers fought over how best to scale Ethereum with constant upgrades and hard forks. He said:

“The more it’s used the faster it dies.”

However, with March seeing a new all-time high of over 1.97 million smart contract deployments, sentiment could be turning. According to online analytics firm Dune Analytics, there has been an average of 670,000 contracts per month over the past 12, coinciding with a low cost to deploy — an average of USD 11,600 per deployment.

Does this mean rising adoption of Ethereum and more optimism for Ethereum 2.0? When looking at transactions, their volume has not corresponded, suggesting that many smart contracts are not seeing user adoption or use, still far away from the November 2018 all-time high when only 1.5 million deployments were seen. Transactions, under 850,000 a day now, are also a way off from a 4 January high of 1,349,890 transactions.

Nevertheless, with Proof-of-Stake coming and a faster, cheaper Ethereum, ETH holders will be looking up with hope.

In any case, we now look at another piece of data that now suggests all the furor surrounding Tether, the world’s most popular stablecoin, could prove to be wrong. Roundly ballasted online for its ability to supposedly manipulate Bitcoin prices on major exchanges, Tether (USDT) and other stablecoins are, after all, unable to drive up crypto price, says the Centre for Economic Policy Research.

UC Berkeley’s Richard K Lyons and Warwick Business School’s Ganesh Viswanath-Natraj  examined the issuance of USDT) and other stablecoins over the last three years, to cover the boom period of 2017, and published their findings in a new study.

It throws the old theory of Bitcoin pumping in value every time new USDT tokens are issued by its operating company Tether, as they found little to show price and stablecoin correlation. It sums up their findings:

“This column argues that aggregate stable coin issuance does not drive crypto prices, in contrast to claims from previous studies. Instead, it claims that issuance behaviour can be explained as maintaining a decentralised system of exchange rate pegs and acting as a safe haven in the digital asset economy. The latter can be demonstrated by the significant stable coin premiums during the COVID-19 panic of March 2020…. Our bottom line: We find no systematic evidence of stablecoin issuance driving cryptocurrency prices.”

The data they collected shows that investors use issued stablecoins precisely as they were intended, which is a stable store of value protecting them from crypto’s extreme volatility. They found that some investors rebalanced portfolios towards USDT and other stablecoins as this incurred only the most minimal costs for intermediation.

Stablecoin issuance is a response to market demand, they say, and that stablecoins are a consistent performer in the role of a safe haven in digital economies.

So is it time to put Tether conspiracy theories to bed? Or is the long-held belief, led by those like John Griffin from the University of Texas and Amin Shams from Ohio State, that Tether has had its say in Bitcoin price, more than just a theory?

For us, a centralized coin used at centralized exchanges poses a lot of risk of manipulation. And once must be careful to accept all data only after self-verification.

Trade well!

 

BitcoinNews.com is committed to unbiased news and upholding journalistic codes of ethics. For more information please read our Editorial Policy here.

Follow BitcoinNews.com on Twitter: @bitcoinnewscom
Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Image Courtesy: Pixabay
Comments are closed.

Check Also

Trending Bitcoin News and Market Sentiment, Weekly Edition, September 17th, 2020: Uniswap Governance Token Sends Users Into Frenzy, Kraken is First Crypto Exchange to Become US Bank

Defi madness as Uniswap token drop to thousands of users sends ETH fees to all-time high K…