Posted 12 months ago | by Ben Armstrong
Ethereum Ecosystem Sees Massive Stablecoin Growth, Huge Issuance
In recent years, the use of Ethereum has seen massive growth. A significant number of decentralized applications (dApps) have been designed to function on its blockchain. Ethereum also allows the creation Defi ecosystem that could grow to be worth billions of dollars.
Over the past six months, Ethereum has been leveraged to create a massive amount of stablecoins. Thanks to the growth of these tokens, Ethereum's enterprise value has also expanded, and despite the lower market cap, it is arguably more popular than Bitcoin.
In some ways. Ethereum's current price seems to be low, due to the robust nature of its development culture, and the obvious popularity of the platform.
Ethereum Issuance Explodes Higher
According to blockchain analytics firm Messari, Ethereum is being used to support a wave of new stablecoin issuance. The company reported that there is now $8 billion invested in ETH-based stablecoin assets, which is a large amount.
Investors are likely looking for ways to hedge exposure to cryptocurrencies volatility, which affected the price of Bitcoin, Ethereum, and many other popular tokens this year.
A report from CyptoStale last week stated that the new push for stablecoins could help the price of ETH rise in the medium-term. As Messari said, Ethereum seems to be the big winner in this stablecoin boom and may give rise to more ETH based DeFi products.
A Strong Foundation for ETH Growth
According to Ryan Adams, founder of Mythos Capital and a famous Ethereum advocate, ETH is undervalued based on its present utilization. The billions of USD that are being invested in ETH assets will support the platform and are also likely to drive the underlying asset (ETH) higher.
"In Feb 2016, you have only $2 in the reserve asset of Ethereum. However, whether or not you believe that four years later, this number will be increased to $9b, what will you do next? Of course, I guess you would have backed up the truck. It is what I want to say about ETH today, a bright future when choosing ETH.”
It is clear that instead of being adversely affected by the financial market liquidation we saw over the past few months, cryptos are actually growing new tools for added diversification. For the moment, people are still looking to fiat currencies for stability, but this may change as the establishment financial system sees renewed pressure.
The same infrastructure that is being used to create stablecoins can be used to securitize just about any asset, which may be the next move as fiat currency approaches its intrinsic value, which is nothing at all.