GUSD's Drastic Reduction in Supply
In recent years, the stablecoin market has experienced a significant slowdown, particularly since mid-2022 when Terra's stablecoin collapsed. Furthermore, the New York Department of Financial Services (NYDFS) instructed Paxos to cease the issuance of BUSD last year. Alongside these setbacks, the supplies of three other stablecoin assets, including Gemini's GUSD, have seen a drastic reduction in value, resulting in diminished attention.
GUSD's Plummeting Market Capitalization
As of June 2023, Gemini's GUSD was ranked as the ninth largest stablecoin by market capitalization. Despite receiving an A grade from the independent stablecoin rating firm Bluechip, GUSD lacks significant liquidity on exchanges and thus is not widely used in the crypto markets. Its market capitalization at that time was approximately $564.86 million, but it has now plummeted by 93.10% to $38.93 million.
To put this into perspective, GUSD now represents a mere 0.0423% of USDT's market cap, which stands at $92.10 billion. Additionally, GUSD's global trade volume over the past day has only exceeded a million dollars, whereas USDT's trade volume reached $52.51 billion. Consequently, GUSD's ranking has slipped to the 24th largest stablecoin, currently placing 667th among 12,000 crypto assets. While GUSD primarily trades on Gemini, it is also available on Coinbase and Curve.
The Decline of Paxos' USDP
Another stablecoin that has experienced a decline this year is Paxos' USDP. With a market valuation of a billion dollars until the end of June, USDP's market cap has diminished to $369 million, reflecting a 63% downturn or a $631 million loss. Despite this decline, USDP still retains its position as the ninth largest stablecoin by market valuation. However, it ranked as the seventh largest back in June 2023. The decrease in BUSD issuance by Paxos was expected, but the subsequent shrinkage of USDP was unexpected.
Paxos has recently obtained approval from NYDFS and plans to expand the presence of its stablecoin on Solana. Nevertheless, USDP's global trade volume is only $3.87 million, significantly overshadowed by stablecoin giants like USDC, which saw $9.49 billion in trades over the past day.
The Descent of MIM
Magic Internet Money (MIM), a digital currency pegged to fiat, created by the defi project Abracadabra Money, has also descended in the stablecoin hierarchy. Previously ranked as the sixth largest stablecoin before Terra's downfall, MIM has now dropped to the 21st spot. Its market valuation has decreased from $2.81 billion in April 2022 to $51 million at present.
MIM's market cap was twice its current size earlier this year, but it experienced a sharp contraction. With a trading volume of approximately $309,079, MIM's activity is notably low, even when compared to smaller trade volumes. The most active platform for MIM trading is Trader Joe, with other notable platforms including Camelot and Uniswap V3, primarily paired with wrapped avalanche (WAVAX).
The Uncertain Future of the Stablecoin Market
GUSD, USDP, and MIM have all seen significant declines over the past year, creating a sense of impermanence in the stablecoin market. The downward spiral for MIM began after Terra's UST lost its value, while GUSD's and USDP's downturns occurred in 2023. The failure of UST shook the crypto industry, and even USDC experienced a depegging incident when Silicon Valley Bank collapsed in March 2023.
With these memories of turbulent waters, the stablecoin market now stands at a crossroads. While there is cautious optimism, no one knows for certain what the future holds for stablecoins. Share your thoughts and opinions on the descent of GUSD, USDP, and MIM in the comments section below.
Frequently Asked Questions
How much should your IRA include precious metals
You should remember that precious metals are not only for the wealthy. It doesn't matter how rich you are to invest in precious metals. You can actually make money without spending a lot on gold or silver investments.
You might consider purchasing physical coins, such as bullion bars and rounds. Also, you could buy shares in companies producing precious metals. Another option is to make use of the IRA rollover programs offered by your retirement plan provider.
You can still get benefits from precious metals regardless of what choice you make. Although they aren’t stocks, they offer the possibility for long-term gains.
Their prices are more volatile than traditional investments. This means that if you decide on selling your investment later, you'll likely get more profit than you would with traditional investing.
How much should precious metals make up your portfolio?
Before we can answer this question, it is important to understand what precious metals actually are. Precious metals refer to elements with a very high value relative other commodities. This makes them highly valuable for both investment and trading. Today, gold is the most commonly traded precious metal.
But, there are other types of precious metals available, including platinum and silver. The price of gold fluctuates, but it generally remains stable during times of economic turmoil. It is not affected by inflation or deflation.
In general, prices for precious metals tend increase with the overall marketplace. But they don't always move in tandem with one another. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. This is because investors expect lower interest rates, making bonds less attractive investments.
In contrast, when the economy is strong, the opposite effect occurs. Investors prefer safe assets such as Treasury Bonds and demand fewer precious metals. They become less expensive and have a lower value because they are limited.
To maximize your profits when investing in precious metals, diversify across different precious metals. Furthermore, because the price of precious Metals fluctuates, it is best not to focus on just one type of precious Metals.
Can I keep physical gold in an IRA?
Gold is money, not just paper currency or coinage. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Investors today use gold to diversify their portfolios because gold is more resilient to financial turmoil.
Many Americans now invest in precious metals. Even though owning gold is not a guarantee of making money, there are many reasons why you might want to add gold to your retirement savings portfolio.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. The S&P 500 dropped 21 percent in the same time period, while gold prices rose by nearly 100 percent between August 2011-early 2013. During those turbulent market conditions, gold was among the few assets that outperformed stocks.
The best thing about gold investing is the fact that there's virtually no counterparty risk. You still have your shares even if your stock portfolio falls. Gold can be worth more than its investment in a company that defaults on its obligations.
Finally, gold provides liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. It makes sense to buy small quantities of gold, as it is more liquid than other investments. This allows you take advantage of the short-term fluctuations that occur in the gold markets.
Is gold buying a good retirement option?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
Physical bullion bar is the best way to invest in precious metals. You can also invest in gold in other ways. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren't looking for a safe place to store your wealth. If you need cash flow to finance your investment, then gold stocks could be a good option.
ETFs are an exchange-traded investment that allows you to gain exposure to the market for gold. You hold gold-related securities and not actual gold. These ETFs can include stocks of precious metals refiners and gold miners.
Statistics
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- How do you keep your IRA Gold at Home? It's not exactly legal – WSJ
finance.yahoo.com
bbb.org
How To
The growing trend of gold IRAs
The gold IRA trend is growing as investors seek ways to diversify their portfolios while protecting against inflation and other risks.
Gold IRA owners can now invest in physical gold bullion or bars. It is a tax-free investment that can be used to grow wealth and offers an alternative investment option to those who are concerned about stocks or bonds.
Investors can manage their assets with a gold IRA without worrying about market volatility. Investors can use the gold IRA for protection against inflation and potential problems.
Physical gold is also a great investment option, as it has unique properties like durability, portability, divisibility, and portability.
Additional benefits of the gold IRA include the ability to quickly pass ownership to heirs. Additionally, the IRS does not consider gold a money or a commodity.
All this means that the gold IRA is becoming increasingly popular among investors seeking a haven during financial uncertainty.
—————————————————————————————————————————————————————————————–
By: Jamie Redman
Title: The Decline of GUSD, USDP, and MIM: A Look at the Turbulent Stablecoin Market
Sourced From: news.bitcoin.com/stablecoin-storm-geminis-gusd-shrinks-93-amidst-market-turbulence/
Published Date: Wed, 03 Jan 2024 17:30:57 +0000
Leave a Reply