The Decline of GUSD, USDP, and MIM: A Look at the Turbulent Stablecoin Market

Introduction

Over the past few years, the stablecoin market has experienced significant turbulence, particularly since mid-2022 following the collapse of Terra's stablecoin. Additionally, last year, the New York Department of Financial Services (NYDFS) instructed Paxos to cease the issuance of BUSD. Beyond these setbacks, the supplies of three other stablecoin assets, namely GUSD, USDP, and MIM, have drastically reduced, resulting in a decline in their market rankings and attention.

The Plight of GUSD

As of June 2023, Gemini's stablecoin GUSD ranked as the ninth largest stablecoin by market capitalization. However, it lacked significant liquidity on exchanges and was not widely used in the crypto markets. Since then, GUSD's market capitalization has plummeted by 93.10% to $38.93 million, representing a mere 0.0423% of USDT's market cap. Its global trade volume has also significantly decreased, further contributing to its decline in rank and market position.

The Diminution of USDP

Paxos' stablecoin USDP, which boasted a market valuation of a billion dollars until the end of June, has also experienced a decline. Its market cap has diminished to $369 million, reflecting a 63% downturn. Despite this decline, USDP retains its position as the ninth largest stablecoin by market valuation. However, it ranked as the seventh largest back in June 2023. The unexpected shrinkage of USDP has impacted its market rank and overall prominence.

The Descent of MIM

Magic Internet Money (MIM), a stablecoin created by the defi project Abracadabra Money, has also seen a significant decline in market ranking. It has descended from the sixth largest stablecoin to the 21st spot, with its market valuation dropping from $2.81 billion to $51 million. The decline in MIM's market cap occurred around the end of February, and its trading volume remains notably low compared to other stablecoins.

The Crossroads of the Stablecoin Market

The stark descent of GUSD, USDP, and MIM over the past year highlights the impermanence and volatility of the stablecoin market. The collapse of Terra's UST and the depegging incident of USDC have shaken the industry, raising concerns about stability and trust. While the stablecoin market appears cautiously optimistic, the future remains uncertain, and the tides of change may bring new challenges and opportunities.

Conclusion

The decline of GUSD, USDP, and MIM in the stablecoin market reflects the challenges and uncertainties faced by these digital assets. The reduction in their supplies, coupled with a lack of liquidity and trading volume, has resulted in a decline in their market rankings and overall prominence. As the stablecoin market continues to evolve, it is crucial for these assets to adapt and innovate to regain their position and relevance in the ever-changing crypto landscape.

What are your thoughts on the descent of GUSD, USDP, and MIM over the past year? Share your opinions and insights in the comments section below.

Frequently Asked Questions

Is gold a good choice for an investment IRA?

If you are looking for a way to save money, gold is a great investment. You can also diversify your portfolio by investing in gold. But gold is not all that it seems.

It has been used throughout history as currency and it is still a very popular method of payment. It is often called “the most ancient currency in the universe.”

Gold is not created by governments, but it is extracted from the earth. It's hard to find and very rare, making it extremely valuable.

The supply and demand for gold determine the price of gold. The strength of the economy means people spend more, and so, there is less demand for gold. The value of gold rises as a consequence.

On the flip side, people save cash for emergencies and don't spend it. This leads to more gold being produced which decreases its value.

It is this reason that gold investing makes sense for businesses and individuals. You will benefit from economic growth if you invest in gold.

You'll also earn interest on your investments, which helps you grow your wealth. You won't lose your money if gold prices drop.

What is the cost of gold IRA fees

A monthly fee of $6 for an Individual Retirement Account is charged. This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.

If you wish to diversify your portfolio, you may need to pay additional fees. These fees can vary depending on which type of IRA account you choose. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.

Most providers also charge an annual management fee. These fees range from 0% to 1%. The average rate is.25% each year. These rates can be waived if the broker is TD Ameritrade.

Should You Open a Precious Metal IRA?

Precious metals are not insured. This is the most important fact to know before you open an IRA account. If you lose money in your investment, nothing can be done to recover it. This includes losing all your investments due to theft, fire, flood, etc.

Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items can be lost because they have real value and have been around for thousands years. They are likely to fetch more today than the price you paid for them in their original form.

When opening an IRA account, make sure you choose a reputable company offering competitive rates and high-quality products. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.

You won't get any returns until you retire if you open an account. Remember the future.

How much gold should your portfolio contain?

The amount of money you need to make depends on how much capital you are looking for. Start small with $5k-10k. As you grow, it is possible to rent desks or office space. This way, you don't have to worry about paying rent all at once. You only pay one month.

It is also important to decide what kind of business you want to run. My company is a website creator. We charge our clients about $1000-2000 per monthly depending on what they order. So if you do this kind of thing, you need to consider how much income you expect from each client.

Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. This means that you may only be paid once every six months.

So you need to decide what kind of income you want to generate before you know how much gold you will need.

I would recommend that you start with $1k-2k worth of gold and then increase your wealth.

What does gold do as an investment?

The price of gold fluctuates based on supply and demand. It is also affected negatively by interest rates.

Due to limited supplies, gold prices are subject to volatility. Physical gold is not always in stock.

Statistics

(Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)

External Links

How To

How to hold physical gold in an IRA

An easy way to invest gold is to buy shares from gold-producing companies. This method is not without risks. There's no guarantee these companies will survive. Even if the company survives, they still face the risk of losing their investment due to fluctuations in gold's price.

Alternative options include buying physical gold. This requires you to either open up your account at a bank or an online bullion dealer or simply purchase gold from a reputable seller. The advantages of this option include the ease of access (you don't need to deal with stock exchanges) and the ability to make purchases when prices are low. It is also easier to check how much gold you have stored. You will receive a receipt detailing exactly what you paid. You have less risk of theft when investing in stocks.

There are however some disadvantages. You won't be able to benefit from investment funds or interest rates offered by banks. You won't have the ability to diversify your holdings; you will be stuck with what you purchased. Finally, the tax man might ask questions about where you've put your gold!

BullionVault.com has more information about how to buy gold in an IRA.

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By: Jamie Redman
Title: The Decline of GUSD, USDP, and MIM: A Look at the Turbulent Stablecoin Market
Sourced From: news.bitcoin.com/stablecoin-storm-geminis-gusd-shrinks-93-amidst-market-turbulence/
Published Date: Wed, 03 Jan 2024 17:30:57 +0000

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