Are the 7% — 19% USD Digital Savings rates Bubbly or Wobbly?
While anything growing exponentially these days, can be characterized as Bubbly and could actually be Wobbly, the question to ask yourself is whether you are compensated for the risks you are taking. This is no new insight or something that applies to one class of investable assets and not to another.
Today I won't talk about public stocks or private market valuations or cryptocurrencies. I want to focus on stablecoins and more so on the currently dominant share which is stablecoins backed by the US dollar. The reason is that USD backed stablecoins have been growing at an exponential rate (not Wobbly at all) and there are several companies that offer extremely high-interest rates for your USD backed stablecoin deposits, to the point that you may claim they are Bubbly.
Growth of Stablecoins
There is an undeniable fact in the cryptocurrency market. Bitcoin used to be the reserve currency in the cryptocurrency market, which meant that when crypto traders took profits, they would hold Bitcoins and not fiat. Bitcoin has lost this reserve currency status to Stablecoins. I won’t say forever but I can confidently say that will not…
