Deutsche Bank’s Intriguing Research: Stabilcoin Market Faces Frightening Prospects!

  • Deutsche Bank Research analysts predict that many stablecoin projects are likely to fail, with only 14% expected to survive.
  • Stablecoins are digital currencies pegged to another asset like fiat currency or gold, and are often considered a “safe haven” in the volatile crypto market.
  • The analysts examined approximately 334 stablecoins launched since 1800 and found that only a few currently exist.

Deutsche Bank Research suggests that a majority of stablecoin projects are doomed to fail, with only a small fraction expected to survive in the long run.

Stablecoin Projects: A High Failure Rate

According to a study by Deutsche Bank Research analysts, many stablecoin projects are likely to fail, with only 14% expected to survive. Stablecoins are digital currencies pegged to another asset like fiat currency or gold. Due to their stability, many investors prefer them as a “safe haven” in the volatile crypto market. The analysts examined approximately 334 stablecoins launched since 1800 and found that only a few currently exist.

Key Factors for Survival

The analysts identified three key attributes that successful projects have, which unsuccessful ones lack: reliability, reserve support, and tightly controlled systems. According to the study, 49% of stablecoins failed after existing for only 8 to 10 years. The analysts argued that “macroeconomic factors play a key role in determining the sustainability of a stablecoin.”

Comparison with Fiat Currencies

Deutsche Bank Research Senior Strategist Marion Laboure stated, “We chose to compare stablecoins with fiat currencies because historically, their similarities make them alike. Both require extensive reserves and reliability from issuers. Most are exposed to speculative forces, and the majority of both stablecoins and historical currency pegs follow the USD.”

Reactions from the Industry

However, Tether, the issuer of the stablecoin giant USDT, disputed the Deutsche Bank Research report, claiming that the analysts could not produce “concrete data” to support their arguments. While the researchers pointed to Terraform Labs’ TerraUSD as an example of a stablecoin’s downfall, Tether commented that “Comparing it with Terra, an algorithmic stablecoin, is misleading and irrelevant to the discussion about reserve-backed coins.”

Conclusion

In conclusion, while stablecoins have emerged as a popular form of digital currency, their long-term sustainability remains questionable. As the crypto market continues to evolve, the survival of these projects will largely depend on their ability to maintain reliability, reserve support, and tightly controlled systems.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

IndiGo (INDIGO) Stock Soars 80% in 8 Months: Is Now the Time to Buy?

<ul> <li>Shares of InterGlobe Aviation, the parent company...

Mercuryo Integrates Injective (INJ) for Enhanced Crypto Transactions

Mercuryo, a leading global payments network, has...

Caitlyn Jenner Endorses $Jenner Coin, Issues Apology for Previous Misunderstandings

Caitlyn Jenner reaffirms her commitment to $Jenner...

Bitcoin (BTC) Surges to Record $70,000 Milestone After Prolonged Battle

Bitcoin has recently broken through the significant...

Ethereum (ETH) Poised for $4.5K Surge Ahead of ETF Launch: Market Analysts Predict Bullish Trend

Ethereum’s price nears $4,000, influenced by optimism...
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Bitcoin (BTC) Price Drops After Failing to Surpass $69K Resistance Level: Market Analysis

Bitcoin dips 0.02%, failing to breach $69,336...

Bitcoin (BTC) Price Analysis: Bullish Surge Propels BTC Towards $70K Resistance

Bitcoin (BTC) continues its upward trajectory, trading...

GBPJPY Technical Analysis Report: Key Insights for May 27, 2024

The cryptocurrency market continues to evolve rapidly,...

Shiba Inu (SHIB) Rally Hits a Roadblock: Key Insights and Market Analysis

Shiba Inu (SHIB) price action has gained...
Sheila Belson
Sheila Belsonhttps://en.coinotag.com
Sheila Belson is a 20-year-old financial content editor who ventured into the realm of cryptocurrencies in 2023. Enthralled by the innovative world of non-fungible tokens (NFTs), she harbours a profound affection for Ethereum. With a sharp eye for detail, Sheila skillfully navigates the dynamic crypto landscape, continuously seeking to enrich her understanding and share her passion through engaging and insightful content.
spot_imgspot_imgspot_imgspot_img

Mercuryo Integrates Injective (INJ) for Enhanced Crypto Transactions

Mercuryo, a leading global payments network, has announced its integration with Injective, a prominent decentralized finance (DeFi) protocol, now supporting INJ tokens. ...

Caitlyn Jenner Endorses $Jenner Coin, Issues Apology for Previous Misunderstandings

Caitlyn Jenner reaffirms her commitment to $Jenner token, clarifies focus amid ad confusion, and launches on Ethereum to boost reach. Jenner...

Bitcoin (BTC) Surges to Record $70,000 Milestone After Prolonged Battle

Bitcoin has recently broken through the significant $70,000 mark, showcasing bullish control. However, analysts remain skeptical about the sustainability of this...