SEC Cracks Down on Unregulated ICOs in America – Meanwhile a New Zealand Based Financial Service Provider Launches an ICO for the First Time
The current environment of stablecoins is as follows
[Current stablecoin market](https://i.redd.it/1creeefaha121.png)
That’s $3.24 B USD sitting on the sidelines waiting to jump in. Out of a current marketcap of 183B, this is 1.8%. Prior to the start of bullrun, in May 2017 there was only 60 million in Tether (and really no other competitors of note), which only amounted to 0.12% of total market cap, 15 times lower. One thing this shows is just how much tether was printed (which isn’t really news to anyone).
I suppose that shouldn’t come to many as a surprise, considering we were at the start of a bullrun vs being at the end of a bear run right now. However, IF this end of the bear run IS ALSO the start of the next bullrun the amount of money coming back into this space could be massive.
It’s estimated that roughly 60 Billion new money was responsible for going from $1000 BTC to $20,000 BTC, and the magnification factor from new (fiat) to old (tether) money pushing the past bullrun would then be 1000:1.
Now I suppose we need to ask ourselves if this time is different? Did enough of the public get wind of BTC and crypto on the last bullrun that the next one will be dampened? Every single bullrun so far has been an order of magnitude higher than the last one. I’m getting baby boomers at my work asking me how to buy BTC in the last few weeks, and considering something like 5% of all people could even remotely describe what BTC is (during the hype mania phase of the last run), I’d say we are far far away from any dampening effect.
So how much new money is going to come into this space when companies like Amazon are announcing Ethereum based crypto plans, when we have NASDAQ and NYSE giving crypto credit, when we have [Forbes producing articles like this](https://www.forbes.com/sites/katinastefanova/2018/11/28/the-trade-of-the-decade-betting-on-bitcoin/#7b39c69c458a).
Lets just pretend for the sake of argument and PURE ENTERTAINMENT that the magnification factor will be 1000:1 again. This could be optimistic, but could equally be conservative depending on your position on how much new money will come in on the next wave. That means we’re looking at roughly 3.24 trillion dollars coming into this space. This number seems astronomical, especially considering that an estimated 60B pushed us from $50B to $850B market cap (a further magnification factor of 17x). Using similar ratios, that could mean that the next insanely overbought parabolic peak would be around 55 Trillion marketcap. Using the same BTC dominance as it had during the past peak (roughly 37%) this puts BTC at 20T marketcap, somewhere around 800x from today.
Okay so those numbers are absurd for many reasons – one is that we just eclipsed the total fiat circulation. For perspective the worlds narrow money marketcap is somewhere in the ballpark of 26-30T (this is world coins, bank notes and chequing deposits). So before you start getting big saucer eyes, pull yourself back to reality.
So how much of that pie will BTC and cryptos occupy? The total BROAD supply is 80-100T. This includes things like all markets, stocks, etc. So just be weary when people make extraordinary claims about crypto market cap hitting ridiculous figures like 20 trillion, etc. Even this analysis estimate of the next run bringing in 3.24 trillion dollars into the market is ridiculous and shouldn’t be seriously considered.
But what WILL the next bull run look like, IF it happens?
Well, there’s a LOT of money in stable coins right now. Nobody leaves crypto and sells to tether and walks away. Everyone in Tether is going to be looking to jump back in. However, for every buyer, there has to be a seller. Where will those sellers come from? There are 3.24 billion dollars worth of money just waiting to enter this space, but they must get replaced with 3.24 billion dollars worth trying to leave the space. Hence, why if we are going to have stability, tether and all stablecoins absolutely must have burn programs for people wanting to trade their tether back into fiat. I.e. they must be asset-backed.
However, if we get there, and it looks like we might with tether releasing USD/Tether redemption, then we could right now be the representation of a coiled up snake looking to spring. The next bullrun is unlikely (read: impossible) to repeat what happened in 2017 (unless we fall further from here), but even crazy predictions like $1M bitcoin sometime in the next decade are a very real possibility.