Stablecoins Find A Mainstream Use Case: eToro

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Stablecoins Find A Mainstream Use Case: eToro
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eToro Quarterly Report: Q2 2020, stablecoins find a mainstream use case

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Q2 2020 hedge fund letters, conferences and more

Inflation and remittances fuel uptick in mainstream adoption of stablecoins around the world

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Stablecoins Go Mainstream

In areas where unrest and inflation run rampant, individuals and businesses are increasingly turning to stablecoins to hedge against depreciation and send funds abroad quickly and cost effectively. This is just one of the findings in new research released today by social trading platform eToro and The Tie which examines the main themes and drivers within the crypto market.

Countries like Venezuela (where inflation exceeds 15,000 percent), and Iran (where inflation is over 34 percent) are seeing significant adoption of digital assets including Tether (USDT), which has more than doubled in overall value to around $10 billion since the start of the year, our research has found.

“While media coverage in Q2 continued to focus on bitcoin, the real story emerging from the data is centered around stablecoins,” said Guy Hirsh, Managing Director of eToro US. “Fiat inflows into stablecoins exceeded $5B in only six months. We might be on the cusp of a systemic change, where developing countries that are searching for a way to ‘exit’ fiat-controlled government systems.”

Bitcoin vs Gold And Other Cryptocurrencies

Additional key findings include:

  • Investor sentiment around bitcoin and gold became increasingly correlated as directional price movement remains disconnected. In June, the price of bitcoin and gold futures only moved in the same direction 50 percent of the time, while bitcoin and S&P 500 futures price moved in the same direction 62 percent of the time.
  • Many altcoins continue to outperform bitcoin intra-quarter. This past quarter, Cardano’s ADA and ether saw the largest jumps in price, up 175 percent and 70 percent, respectively. This came as bitcoin performed in the middle of the pack in Q2, as the 8th best performing of the 15 assets available on eToro US.
  • DeFi has become a major part of the cryptocurrency narrative, with more media mentions of DeFi in Q2 than bitcoin's halving. However, media mentions of DeFi remain exclusively within crypto native publications, and despite the hype the market is still extremely small, likely in the low thousands of users.
  • Tezos was the only crypto which saw an increase in the percentage of eToro users investing in it. All other cryptoassets saw decreases as eToro users globally increasingly invested in stocks.

The report also includes interviews with some of the best performing traders on eToro, sharing their unique perspectives on where they see the best opportunities. Additionally, insights are also included from Arca’s head of research, Katie Talati; and Tron founder Justin Sun.

eToro launched its crypto trading platform in the US in March 2019. Since then, US registrations on eToro have increased over 221 percent.


About eToro:

eToro was founded in 2007 with the vision of opening up the global markets so that everyone can invest in a simple and transparent way. We are a global community of more than 14 million registered users in over 140 countries. Due to the simplicity of the platform users can easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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