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On Solid Ground: Stablecoins Thriving Amid Financial Uncertainty

On Solid Ground: Stablecoins Thriving Amid Financial Uncertainty

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The state of stablecoins: Demand for stablecoins continues to grow amid financial uncertainty.

As a new COVID-19 stimulus bill is debated in the United States Senate and Bitcoin (BTC) begins to bounce back from its volatility lows, the demand for stablecoins continues to grow. Powered both by the stability that they provide to tokenholders and the demand created by decentralized finance lending and yield farming, stablecoins — Tether (USDT) in particular — continue to hit record figures consistently.

According to a report by cryptocurrency data and research firm Messari, USDT may soon become the cryptocurrency with the greatest daily transaction volume in terms of U.S. dollars transferred across all Tether-enabled blockchains. According to Ryan Watkins, research analyst at Messari, that may happen sooner rather than later. He told Cointelegraph: “USDT certainly could flip Bitcoin in transaction volume in August, and if not then sometime soon after. Stablecoins as a whole have already flipped Bitcoin in transaction volume.”

Bitcoin vs Tether daily transaction value

While USDT and a few other dollar-pegged tokens such as Binance USD (BUSD) or USD Coin (USDC) have been leading the way in the growth of stablecoins, even commodity-based stablecoins have been gaining traction lately. Tether’s new gold-backed stablecoin, Tether Gold (XAUT), is reportedly seeing high demand as its underlying commodity recently broke above the $1,900 mark — a number that gold has not seen since September 2011 — even coming close to reaching $2,000 for the first time.

Stablecoin issuance and volumes rise

Although stablecoin volumes have, like most of the cryptocurrency market, remained stagnant during most of the summer, the last few days have seen a considerable uptick in volume for USDT and other dollar-based stablecoins, especially Binance’s BUSD.

Main USD-Backed Stablecoin Contenders - 24h volume

Although stablecoin volume has picked up recently, it is still far from the all-time highs achieved in March. However, the collective market capitalization for all fiat-based stablecoins has been growing consistently, increasing by $3.8 billion in the second quarter of 2020 and counting for over $13.4 billion at the time of writing.

USDT alone is responsible for $11 billion out of the aforementioned $13.4 billion, having only just reached the $10 billion milestone on July 22. This means that USDT’s market cap has more than doubled from $5 billion since March. In fact, Tether even temporarily surpassed Ripple’s XRP to become the third-largest cryptocurrency in the market.

Following USDT, Circle’s USD Coin is the second-largest stablecoin, having been the first Tether competitor to surpass the $1 billion market cap figure in early July. On the other hand, Binance USD has been the fastest-growing stablecoin in 2020, according to Messari.

Why is there demand?

A demand for stable, safe assets like the U.S. dollar may have been the biggest driver for the success of stablecoins in the first half of 2020, according to Ido Sadeh Man, founder of Saga Monetary Technologies, who told Cointelegraph: “The allure of stablecoins is simple: they appear to promise stability — and given the economic tumult of 2020 so far, it is understandable why they are gaining so much attention.”

As Bitcoin surged over the $11,000 mark throughout July 26 and 27, exchange inflows for USDT reached a 2020 high, which suggests buying pressure for BTC and other cryptocurrencies. This is further supported by the decreasing balance of Bitcoin currently being held by major exchanges. In fact, activity for all three of the largest stablecoins — USDT, Dai and USDC — grew tremendously during this time.

On the other hand, the huge growth in activity and value settled in stablecoins does not come from user remittances or transfers but rather interexchange settlements, as noted by Watkins. He told Cointelegraph: “The majority of stablecoin activity is driven by interexchange settlement. Probably somewhere in the realm of 90+%. Though DeFi activity is certainly picking up.”

Challenges and dangers

While stablecoins have been growing on all fronts, there are still challenges and dangers to consider. For example, dollar-pegged stablecoins have lost over 28% of their value alongside the dollar itself as the U.S. Federal Reserve continues to print money. Some stablecoin issuers counteract this issue by pegging a stablecoin to multiple currencies rather than just one, as Sadeh Man stated:

"We have seen in recent months that a single currency value can fluctuate wildly with little warning, due to external factors. Users are seeking more stable havens for their assets value — which is why there have been such significant inflows. Those seeking stability need to interrogate the mechanisms which stabilise their chosen coin — otherwise they could be risking asset value if the currency their stablecoin holding is tethered to unexpectedly fluctuates."

Stablecoins are only as strong as their underlying asset or assets. However, this novel technology still faces many challenges, and the biggest one may soon become regulation, especially as central bank digital currencies start to become a reality. Last year, a panel of senior financial regulators in the U.S. warned about the risk of stablecoins and how their mainstream adoption can negatively impact the economy, and thus, Facebook’s Libra project may never see the light of day.

Related: BSN ’Split’ Can Stimulate China’s Blockchain Sector Toward Global Reach

The problems don’t end there, as technical issues can also present themselves in the future as they have before. For example, the peg of a stablecoin may be broken if there is a security breach, fractional reserve practices, a lack of liquidity or even a lack of trust in the issuing entity. Even large swings in the price of Ether (ETH) can have a devastating effect on the peg of a DeFi-based stablecoin such as MakerDAO’s Dai.

However, there is still much to look forward to. It seems stablecoins have a lot of potential when it comes to providing a possible solution to some of the world’s biggest financial problems such as income inequality and lack of access to banking. Stablecoins are also an important infrastructure piece of the cryptosphere, particularly the DeFi space. As Marc Zeller, integration lead at Aave — a DeFi lending and credit platform — told Cointelegraph: “Stablecoins are the cornerstone of decentralized finance. As a hedging tool, medium of exchange, and unit of account, their growth has largely enabled the DeFi bloom.”

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Simple blood test could predict risk of long-term COVID-19 lung problems

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to…

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UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

Credit: UVA Health

UVA Health researchers have discovered a potential way to predict which patients with severe COVID-19 are likely to recover well and which are likely to suffer “long-haul” lung problems. That finding could help doctors better personalize treatments for individual patients.

UVA’s new research also alleviates concerns that severe COVID-19 could trigger relentless, ongoing lung scarring akin to the chronic lung disease known as idiopathic pulmonary fibrosis, the researchers report. That type of continuing lung damage would mean that patients’ ability to breathe would continue to worsen over time.

“We are excited to find that people with long-haul COVID have an immune system that is totally different from people who have lung scarring that doesn’t stop,” said researcher Catherine A. Bonham, MD, a pulmonary and critical care expert who serves as scientific director of UVA Health’s Interstitial Lung Disease Program. “This offers hope that even patients with the worst COVID do not have progressive scarring of the lung that leads to death.”

Long-Haul COVID-19

Up to 30% of patients hospitalized with severe COVID-19 continue to suffer persistent symptoms months after recovering from the virus. Many of these patients develop lung scarring – some early on in their hospitalization, and others within six months of their initial illness, prior research has found. Bonham and her collaborators wanted to better understand why this scarring occurs, to determine if it is similar to progressive pulmonary fibrosis and to see if there is a way to identify patients at risk.

To do this, the researchers followed 16 UVA Health patients who had survived severe COVID-19. Fourteen had been hospitalized and placed on a ventilator. All continued to have trouble breathing and suffered fatigue and abnormal lung function at their first outpatient checkup.

After six months, the researchers found that the patients could be divided into two groups: One group’s lung health improved, prompting the researchers to label them “early resolvers,” while the other group, dubbed “late resolvers,” continued to suffer lung problems and pulmonary fibrosis. 

Looking at blood samples taken before the patients’ recovery began to diverge, the UVA team found that the late resolvers had significantly fewer immune cells known as monocytes circulating in their blood. These white blood cells play a critical role in our ability to fend off disease, and the cells were abnormally depleted in patients who continued to suffer lung problems compared both to those who recovered and healthy control subjects. 

Further, the decrease in monocytes correlated with the severity of the patients’ ongoing symptoms. That suggests that doctors may be able to use a simple blood test to identify patients likely to become long-haulers — and to improve their care.

“About half of the patients we examined still had lingering, bothersome symptoms and abnormal tests after six months,” Bonham said. “We were able to detect differences in their blood from the first visit, with fewer blood monocytes mapping to lower lung function.”

The researchers also wanted to determine if severe COVID-19 could cause progressive lung scarring as in idiopathic pulmonary fibrosis. They found that the two conditions had very different effects on immune cells, suggesting that even when the symptoms were similar, the underlying causes were very different. This held true even in patients with the most persistent long-haul COVID-19 symptoms. “Idiopathic pulmonary fibrosis is progressive and kills patients within three to five years,” Bonham said. “It was a relief to see that all our COVID patients, even those with long-haul symptoms, were not similar.”

Because of the small numbers of participants in UVA’s study, and because they were mostly male (for easier comparison with IPF, a disease that strikes mostly men), the researchers say larger, multi-center studies are needed to bear out the findings. But they are hopeful that their new discovery will provide doctors a useful tool to identify COVID-19 patients at risk for long-haul lung problems and help guide them to recovery.

“We are only beginning to understand the biology of how the immune system impacts pulmonary fibrosis,” Bonham said. “My team and I were humbled and grateful to work with the outstanding patients who made this study possible.” 

Findings Published

The researchers have published their findings in the scientific journal Frontiers in Immunology. The research team consisted of Grace C. Bingham, Lyndsey M. Muehling, Chaofan Li, Yong Huang, Shwu-Fan Ma, Daniel Abebayehu, Imre Noth, Jie Sun, Judith A. Woodfolk, Thomas H. Barker and Bonham. Noth disclosed that he has received personal fees from Boehringer Ingelheim, Genentech and Confo unrelated to the research project. In addition, he has a patent pending related to idiopathic pulmonary fibrosis. Bonham and all other members of the research team had no financial conflicts to disclose.

The UVA research was supported by the National Institutes of Health, grants R21 AI160334 and U01 AI125056; NIH’s National Heart, Lung and Blood Institute, grants 5K23HL143135-04 and UG3HL145266; UVA’s Engineering in Medicine Seed Fund; the UVA Global Infectious Diseases Institute’s COVID-19 Rapid Response; a UVA Robert R. Wagner Fellowship; and a Sture G. Olsson Fellowship in Engineering.

  

To keep up with the latest medical research news from UVA, subscribe to the Making of Medicine blog at http://makingofmedicine.virginia.edu.


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Looking Back At COVID’s Authoritarian Regimes

After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked,…

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After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.

Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.

These are the opening two paragraphs of my latest Defining Ideas article, “Looking Back at COVID’s Authoritarian Regimes,” Defining Ideas, March 14, 2024.

Another excerpt:

That wasn’t the only uncertainty. My daughter Karen lived in San Francisco and made her living teaching Pilates. San Francisco mayor London Breed shut down all the gyms, and so there went my daughter’s business. (The good news was that she quickly got online and shifted many of her clients to virtual Pilates. But that’s another story.) We tried to see her every six weeks or so, whether that meant our driving up to San Fran or her driving down to Monterey. But were we allowed to drive to see her? In that first month and a half, we simply didn’t know.

Read the whole thing, which is longer than usual.

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The hostility Black women face in higher education carries dire consequences

9 Black women who were working on or recently earned their PhDs told a researcher they felt isolated and shut out.

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Isolation can make opportunities elusive. fotostorm via Getty Images

Isolated. Abused. Overworked.

These are the themes that emerged when I invited nine Black women to chronicle their professional experiences and relationships with colleagues as they earned their Ph.D.s at a public university in the Midwest. I featured their writings in the dissertation I wrote to get my Ph.D. in curriculum and instruction.

The women spoke of being silenced.

“It’s not just the beating me down that is hard,” one participant told me about constantly having her intelligence questioned. “It is the fact that it feels like I’m villainized and made out to be the problem for trying to advocate for myself.”

The women told me they did not feel like they belonged. They spoke of routinely being isolated by peers and potential mentors.

One participant told me she felt that peer community, faculty mentorship and cultural affinity spaces were lacking.

Because of the isolation, participants often felt that they were missing out on various opportunities, such as funding and opportunities to get their work published.

Participants also discussed the ways they felt they were duped into taking on more than their fair share of work.

“I realized I had been tricked into handling a two- to four-person job entirely by myself,” one participant said of her paid graduate position. “This happened just about a month before the pandemic occurred so it very quickly got swept under the rug.”

Why it matters

The hostility that Black women face in higher education can be hazardous to their health. The women in my study told me they were struggling with depression, had thought about suicide and felt physically ill when they had to go to campus.

Other studies have found similar outcomes. For instance, a 2020 study of 220 U.S. Black college women ages 18-48 found that even though being seen as a strong Black woman came with its benefits – such as being thought of as resilient, hardworking, independent and nurturing – it also came at a cost to their mental and physical health.

These kinds of experiences can take a toll on women’s bodies and can result in poor maternal health, cancer, shorter life expectancy and other symptoms that impair their ability to be well.

I believe my research takes on greater urgency in light of the recent death of Antoinette “Bonnie” Candia-Bailey, who was vice president of student affairs at Lincoln University. Before she died by suicide, she reportedly wrote that she felt she was suffering abuse and that the university wasn’t taking her mental health concerns seriously.

What other research is being done

Several anthologies examine the negative experiences that Black women experience in academia. They include education scholars Venus Evans-Winters and Bettina Love’s edited volume, “Black Feminism in Education,” which examines how Black women navigate what it means to be a scholar in a “white supremacist patriarchal society.” Gender and sexuality studies scholar Stephanie Evans analyzes the barriers that Black women faced in accessing higher education from 1850 to 1954. In “Black Women, Ivory Tower,” African American studies professor Jasmine Harris recounts her own traumatic experiences in the world of higher education.

What’s next

In addition to publishing the findings of my research study, I plan to continue exploring the depths of Black women’s experiences in academia, expanding my research to include undergraduate students, as well as faculty and staff.

I believe this research will strengthen this field of study and enable people who work in higher education to develop and implement more comprehensive solutions.

The Research Brief is a short take on interesting academic work.

Ebony Aya received funding from the Black Collective Foundation in 2022 to support the work of the Aya Collective.

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