A new NewsBTC article has created an interesting rumor for people who are concerned with the future of Bitcoin. As you may have heard, Coinbase is now focused on listing more assets, especially for its non-U. S. version. Two of these assets are 0x (ZRX) and Basic Attention Token (BAT).
As expected in this kind of situation, the new assets were pumped and dumped. Pump and dump, in case you are not quite familiar with the term, is how it is called when you inflate the value of an asset and then sell it back for profit.
A lot of people lose money and some few bastards take it. This is very common, yet very much frowned upon, in the crypto market. With the rise of these two assets in the most prominent exchange of the most powerful country in the world, some smart folks had their way and duped others. However, something is different this time.
The whole argument from the NewsBTC article is that the assets were only paired with Circle’s USD Coin (USDC), which could “raise a few eyebrows” and, from this, create a whole argument that Coinbase is trying to “disrupt” or, in less soft words, steal Bitcoin’s place as the main crypto reserve asset.
USDC Against BTC
Circle and Coinbase have made a recent partnership to list USD Coin (USDC) in Coinbase as sort of its “official” stablecoin. Before that, the company simply did not have one. USDC tokens are based in ERC20 Ethereum protocol and they are all backed and pegged by the USD, just like Tether is.
The main difference, though, is that here the process is more transparent than with Tether, which has been openly criticized many times for its lack of transparency in the market. The tokens are also fully regulated and audited, so it is a better version of Tether, basically (unless you are into shady companies that possibly do not have all the money that they affirm they have).
At the moment, USDC has a volume of $2.2 million USD daily and a market cap of $134 million USD that keeps growing up. Yes, it is still away from Tether (USDT) but growing fast now that it is with Coinbase.
The big break now is that Coinbase just made the next step and started to list USDC trading pairs and, well, only them. “Screw Bitcoin”, somebody in Coinbase must have said, because now they have a stablecoin and Bitcoin is not that much useful anymore. While users from Europe and the U. K. have EUR and GBP, Americans will only use USDC.
Taking Bitcoin Off The Top
The Coinbase plan, according to the article, is to try and take Bitcoin’s place as the core medium for exchange. Basically, Stellar, Cardano and Zcash will possibly be listed soon and there is the chance that they might also only be paired with USDC and fiat currency, not Bitcoin.
Some people argue that so many stablecoins are slowly weakening Bitcoin’s status as a crypto reserve (I, on the other hand, would say that the bear market is clearly doing that and that stablecoins are just an answer from the market).
Should You Trust This Rumor?
Yes, but with a grain of salt. The whole analysis is based on factual evidence like Coinbase “abandoning” Bitcoin, but it is too early to speculate. Also, the whole article has a tone as if Bitcoin should be somewhat protected, which does not make any sense since it is a decentralized token that has to thrive on its own merits instead of being protected because it is traditional.
Think like this: Coinbase has a new centralized toy. It’s theirs. Why would they use an asset that has been taking a beating from the market this year when they now have their own which is less volatile? Unfortunately for all Bitcoin evangelists, Coinbase’s attitude makes sense.
However, it would also be foolish to ignore that Bitcoin is a profitable product for Coinbase, so it will not simply abandon it completely. The scheme is more complicated than just trying to “steal” Bitcoin’s place. It's about not depending on third parties when you have your own assets.
While we are often sold lies about the good of the “ecosystem”, most centralized companies are all about themselves. They will all take away Bitcoin’s place with something that they own simply because it is largely more profitable and this should be expected, not something for the community to be concerned about.
Coinbase listed BAT only against USDC, not BTC. So if you wanna buy BAT (not that anyone should), you need to buy USDC first. Let's see if this trend continues with future pairs (or even existing ones), could be an attempt to disrupt BTC's status as reserve asset of this space.
— Hasu (@hasufl) November 6, 2018