Gabor Gurbacs, an advisor to Tether, a leading stablecoin issuer, has recently made a compelling case for stablecoins as the next transformative force in the financial markets. He believes that stablecoins have the potential to outpace the growth of traditional investment vehicles like exchange-traded funds (ETFs).
Investment wrappers evolved from stocks to hedge funds to mutual funds towards ETFs, each creating a multi-trillion $ market. What's next? In my view, it's stablecoins. Here are a few attributes on why stablecoins have the potential to create the next multi-trillion $ markets. pic.twitter.com/QjM4iMmD4o
— Gabor Gurbacs (@gaborgurbacs) December 27, 2023
In a recent statement, Gurbacs drew attention to the evolution of investment wrappers, from stocks to hedge funds, mutual funds, and ETFs. Each of these, he argued, has contributed to the creation of multi-trillion-dollar markets. He firmly believes that stablecoins are poised to be the next significant development in this trajectory.
Gurbacs outlined several key attributes of stablecoins that substantiate their potential to catalyze the emergence of the next multi-trillion-dollar markets. He compared the unique offerings of stablecoins against traditional investment vehicles, highlighting their disruptive potential.
The Unique Advantages of Stablecoins Over Traditional Investments
Unlike stocks, hedge funds, mutual funds, and ETFs, stablecoins have direct applicability to commerce and payment, an area where traditional investments fall short. Stablecoins also boast low network fees compared to the high management fees associated with traditional investments. Furthermore, stablecoins only require digital wallets, making them easily accessible.
Reflecting on the evolution of Tether’s USDT stablecoin, Gurbacs noted that in 2017, the market capitalization of USDT was under $100 million. He had then alerted Wall Street to the potential of Tether, suggesting it could reach a substantial $100 billion market cap.
Fast forward five years, and Tether is now on the brink of achieving this projected milestone, with the firm’s reserves closing in on the $100 billion mark. Gurbacs anticipates a transformational period for stablecoins over the next five years, reshaping their role in the financial landscape.
As per data from CoinMarketCap, the stablecoin market currently stands at a valuation of $130,672,114,108, with leading stablecoins including USDT, USDC, DAI, and TrueUSD. The future of finance, it seems, may well be stable.