Will there be an increase in USDT Boost Crypto inflation?

欧科区块链 view 33776 2022-1-19 09:57
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Although coins have a positive effect on inflation, they have nothing to do with prices rising or falling, and coins have little effect on inflation.

Mining coins do not have an estimated amount for the "V" and "L" markets.

The announcement of fixed income securities has a greater impact on the rate of return than the inflation process.

Crypto price appreciation has no direct impact on the USD stablecoin spread. Instead, it is more desirable to say that "demand in the industry has led to stress on the issuance of stablecoins", and that issuing more coins could increase the value of a coin. due to the increase in the market.

1. Introduction: Is there a price increase in Crypto World?

Over the past 20 years, news of Tether's massive USDT announcement has surfaced in Crypto press releases, and the second-largest currency firm, USDC, has also launched its "money click" at 21 years old. The market value of the two USD stablecoins has also fallen from $4.1 billion and $5.1 billion at the start of 2020 to $78.4 billion and $44.3 billion today, the second highest value. raised in two years, ranking fourth. Cryptocurrency market cap collection products and items 6.


A stable USD is also called an “on-chain dollar” and “coin issuer” plays a role in Crypto, similar to currency, which is the role of real money banking. Therefore, Tether is also known as the "Federal Reserve of the Monetary Authority".

In a previous article, we talked about how inflation affects the value of Crypto. The Fed's balance sheet has doubled since 2020 and the consumer price index (CPI) has increased by 8.3%. BTC and ETH, which now account for 59% of the cryptocurrency's market value, have increased their market value by 7x over the past two years, with Tether and Circle balancing out at 25x.


Data Retention: OKLink

It can be seen that while two stable financial institutions were "maniacally exchanging money", Bitcoin opened its fourth stock market. We couldn't help but wonder. Is there a price increase in Crypto World?

If there is a price increase in Cryto, is it because of fixed deposit?

Is this an additional stablecoin announcement driven by market demand or is it an additional announcement to raise the price?


Before we look at these questions, let's take a look at both the USD stable and the businesses behind it. It will not be easy to obtain high trading returns such as "riskless assets" or "weak assets" in currencies.

2. Stablecoin working mechanism and the truth behind it

Let's first look at the stable performance of the USD. Using Tether as an example, Tether governs the same amount of money as a bank, and for every USDT coin token, 1 USD of cash or its equivalent must be used to trade, and USDT holders can redeem them (redemption). Return 1 USD to your Tether account and "alert" to 1 USDT at the same time.


Fastener working mechanism

USDT was a US dollar stability coin issued by Tether in 2014 and is managed by the owners of Bitfinex. Originally developed by the Omni protocol of the Bitcoin network, USDT has been modified to deliver to several blockchains including Ethereum, EOS, Tron, Algorand, SLP, and OMG.

USDC is a US dollar stability coin issued by Coinbase and Circle, overseen by an organization called the Center, of which Coinbase and Circle are members. Although USDC is the most popular of Ethereum, other blockchains such as Algorand, Solana, and Stellar have also flagged USDC.

3. Stablecoins are not equal to US dollars.

Every USD stablecoin is tied to a cash dollar or its equivalent, but not USD after all. So whether it is USDT or USDC, the exchange rate fluctuates in certain amounts. The following is a brief summary of the events that hold the value of the USD steady.

Security Precautions: Centralized Tether systems may fail and the USDT rate may drop below $1 due to certain regulations and disclosures.

Conditions such as anonymity, protectionism, volatility, and low prices could make USDT more attractive compared to US fiat currency.

Trading: If BTC and ETH are gold or commodities in the crypto world, the assets must be kept in a "bank" in fiat currency (fixed currency) or in the form of gold (BTC), raw materials (big profits) or wealth. In managing a commodity (Defi) in a financial statement, it is up to the trader to choose. In particular, the value of the cryptocurrency plummeted and traders sought to swap their tokens for USDT as a safe haven (in the sense of demand). When USDT does not have enough capital, the price rises, the price of Crypto rises, fast people have to sell USDT to buy tokens, and supply exceeds demand, causing the price to drop temporarily.

From the above assumptions for fixed income securities, we can make estimates on the relationship between fixed assets and moving expenses.

Demand for stablecoins boosted the value of USDT, and in order to stabilize the price, demand for commodities increased.

The images below may support the above hypothesis. This means that when the value changes, the stability of the string output (glitch or burn) also increases.


File source: OK Link

But is the rise in the total market price of Crypto really unrelated to Tether/Cycle?

This goes back to the first question, is this an additional demand-driven stablecoin announcement or is it an additional announcement to raise the price?

4、Procedures and documentation

Neither USDT nor USDC itself provides Bitcoin or trading partner Ethereum, so conclusions have been drawn from separate analyzes regarding the benefits of additional issuance of USDT from BTC or the implications of the spread of USDC's further exit from ETH will have a major impact.

However, USDT USDC accounts for 74% of the stablecoin market and BTC ETH accounts for 59% of the cryptocurrency market. Therefore, conclusions can be drawn from joint ventures and joint ventures as the content of the study will be correct.

Since the bull market retracement of the second half of 2018 started, we choose the time from 10.1 2018 to 12.01.21 2021 because it is a complete bearish and bullish cycle from 2018 to now. The total data is 1176. All data is valid for one day at a time, including four source data: USDT round, USDC round, BTC price and ETH price.

1. Behavior records in


File source: OK Link

From October 1, 2018 to January 12, 2022, Tether performed a total of 763 on-chain operations, excluding the 2 days before and after and the 3 days before and after the announcement of the new USDT and USDC coins. currently represents 96.3% of equipment in circulation. Of these, there were 602 announcements (total data 1,176), with a total of approximately 83 billion USDT broadcasts, an average of approximately 138 million per hour, and 161 terrorist attacks, for a total of 75 billion. Damage at an average of 46.7 million units/hour.


File source: OK Link

Compared to USDT, USDC is stronger on the chain and a total of 1082 casting and burning activities were conducted during the period, adding 43.9 billion units of USDC, representing 99 .8% of turnover. In addition, the move to all USDC announcements and fires (including the "Medium" column of the chart) is smaller than the move to USDT, which is significant, identical to the capitalization ratio of the industry two (1.7:1). .

2. Price trend after casting vs casting

To assess the benefits of a fixed deposit on value, we divided the 1176 data into two categories: problem day and problem-free day. Among them, mint day is a day when supplies increase from the previous day. A reduction in shipments is a bad thing, anything with unchanged goods is not considered a function of the channel, and the two days that occur are considered unadvertised days.

A 4 hour period (X) of 1, 7, 14 and 30 days was taken to review the difference after announcement and non-release dates. To get the "X-day difference", subtract the current day's value from the value after that time. The formula is:

"Day X" = Price (Day X) - Price (Day)

"SUM_X" and "AVG_X" are obtained by adding "Day X" between new and non-new days and between them. Among them, AVG_X measures the impact rate of each ad/attack the next day, and the models are:

AVG_X = Average ("difference of X days") / X

To measure the effect of the operation of the chain (harmony or fire) on the unit cost, we use "price_diff/unit" from another "X-day difference" where a Stable value represents a changing value. The casting (or ashing) formula, hereinafter referred to as the casting yield, is as follows:

"price_diff/unit" = "SUM_X" / SUM(민트/번) / X

"Growth" refers to how often prices increase/decrease since the date of a problem or non-problem.

The last "diff" line is the difference of values ​​in the first two lines.

"diff" = mint - shine & no


File source: OK Link

In the table above, you can see 5 apps horizontally and vertically.


Growth: The maximum time difference (X) (“diff” column) is only 5%. There is a slight difference in the frequency of price increases after the problem day and the non-problem day.

AVG_X: The relationship between casting day/day is not perfect and the exchange rate (positive/negative of AVG_X) is low, only the total price drops for a short period (1 day) after damage, and section 3 ( X) total.

price_diff: there is no slight difference in the performance of the declaration of a fixed amount after the release date and the price difference on the day is not a problem, and there is no correlation between rooms and "room efficiency". After 14 and 30 days, the effect of mint on the price increase is less than that of mint.


In the days of fixed deposits, BTC and ETH rose sharply, between $43 and $57. the prices drop continuously and on the second day the prices drop.

mint: The "coin efficiency" after 1 and 30 days of time difference (X) is significant, but the overall benefits of adding a fixed amount to the price aren't much different.

In conclusion, even though coins were better for price increases, they had no relation to price increases or decreases, and coins did not affect the magnitude of price increases.

However, the simple analysis of gain or loss after casting is not sufficient to explain the value of a casting at cost, and variations in value before and after casting may still be taken into account.

3. Coinization vs price pattern before and after coinization

Here, for simplicity, we take the value three days ago as the exchange rate before casting ("diff-3/3") and compare it to the value after another short time (X) to get "Piv_X". The formula is:

"Difference-3/3" = [Price (days) -Price (3 days)] / 3

"Compare_X" = "Difference of X hnub"/X – "diff-3/3"

"Sum_x" = sum ("compare_x")

"price_diff/unit" = "SUM_X" / SUM(민트/번) / X


File source: OK Link


File source: OK Link

It can be seen that the positive effect of casting on the value ("price_diff / unit") is small when the value before casting (before & after) is taken into account, even after after comparing with the data after 7, 14, 7, 14 and 14. 30 days. Conversely, the price has generally fallen compared to the previous three days ("SUM" is negative).

Again, coins are less profitable for price increases.

If the value of the coin at full value is unclear, will this affect a particular type of market?

4. Casting vs Citations "V" & "L"

The impact of factors on the price is divided into positive and negative. for,

Benefits can be divided into three types:


"V-shape": fall and rise

"L" shape: rising then fast

"-L" mode: slow motion after drop

The negative effects come in three forms:


"-V" type: up and down

Type "T": rise, then deceleration and rise

Type "-T": Accelerates after falling

In this article, since the relationship between the coin and the rising coin has been investigated, only the "V" and "L" shapes, which indicate value, are selected for analysis.


File source: OK Link


The line "V" (total) indicates the number of "V" because the market occurs at different times (X) out of the total of 1176 data.

The "V" shaped line (mint) shows the number of "V" shaped operations at different times (X) of the casting day (880 data).

The same goes for the "L" shape.

While new coins are generally profitable for different value propositions, only 231 of the 880 coins (7 days) receive a "return" or "V" rating. -good "price comparison". If you can only rely on a stable money market based on the bottom line to determine the price, you only have a 26% chance of making a "good guess".

Therefore, coins have no estimated value for inflection value points.

If you look at the data in the "Ratio" row of the table, you can see that stable investing is good for the "V" type market ("Ratio"> 57%), tab but it's not very clear . When there is an “L” shaped operation, the release date percentage is not high.

That said, coins do not have a meaningful estimate for “V” and “L” like trading.


File source: OK Link


File source: OK Link

When the "V" and "L" values ​​are similar, there is a significant improvement in the "price_diff/unit" over the whole data set (no mint burn) and the key is the difference between the two numbers. The market events above show that the "positive results" in the money market have become more pronounced.

In other words, fixed deposits can generate value for money as the economy grows.

Compared to "V" and "L" modes, "V" mode is superior to "L" mode in terms of "monetary efficiency" and number of ascents.

In other words, term deposits have a greater impact on the rate of return than when the price rises.

V. Summary

Although the value of the fixed currency (USDT and USDC) has generally increased since the currency, there are price expectations and uncertainty of both that make the price stable. According to the data in the article, the release of stability coins does not correlate with the difference in value after giving, and the publication has no estimate of the price increase. It is difficult to determine whether the subsequent release of stablecoins will directly lead to an increase in the total market value.

Therefore, we infer that the rise in the price of crypto has no direct connection to the spread of USD stability coins. Instead, it's more tempting to say that "market demand led to a term deposit crisis."



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Tags: USDT Crypto
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