K线人生飞哥
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Predicting the Next Explosion in the Cryptocurrency Market
Currently, USDX has already exploded, and next, there will be a bunch of stablecoins that will also explode, among which the biggest bomb is USDe. The source of USDe is funding rate arbitrage. For example, USDe issues more coins to buy ETH, then uses it for funding rate arbitrage, and the profits obtained are then used to buy ETH, creating an infinite loop. If the funding rate remains positive for a long time, this model can continue, but once it encounters a bear market where the funding rate remains negative for a long time, it will be a tremendous explosion. This bomb is expected to explode as early as next year.
Currently, in the bull market, the annualized funding rate arbitrage can only yield around 5%, while in previous bull markets, it could yield over 20%. This means that when the bear market arrives, we may face a huge negative funding situation, possibly below -10%. Currently, the prices of BTC and ETH are above the buying prices of various micro-strategy companies, and we can't see much yet. However, once they fall below their holding prices, it is very likely to trigger a chain reaction of liquidations.
Referring to the funding rate situation of SOL after the explosion of FTX, we have reason to believe that at some point in the future, the funding rate will look very bad. At that time, USDe will face a bank run and collapse instantly. I am quite pessimistic about the USDe model; it is merely an upgraded version of algorithmic stablecoins. Back then, UST was betting on the price increase of Luna, while USDe is betting on the funding rate remaining positive. They are both examples of stepping on the left foot while lifting the right foot to the sky, but in the end, they will definitely fall off the roof first.
In the financial market, such good things as rising prices will not be maintained forever; anything with left foot stepping on the right foot behavior should not be touched. It is recommended to replace USDe as soon as possible; a gentleman does not stand under a dangerous wall.
As for USDT and USDC, the old stablecoins, one can rest assured; they have reached a point of being too big to fail.
Currently, USDX has already exploded, and next, there will be a bunch of stablecoins that will also explode, among which the biggest bomb is USDe. The source of USDe is funding rate arbitrage. For example, USDe issues more coins to buy ETH, then uses it for funding rate arbitrage, and the profits obtained are then used to buy ETH, creating an infinite loop. If the funding rate remains positive for a long time, this model can continue, but once it encounters a bear market where the funding rate remains negative for a long time, it will be a tremendous explosion. This bomb is expected to explode as early as next year.
Currently, in the bull market, the annualized funding rate arbitrage can only yield around 5%, while in previous bull markets, it could yield over 20%. This means that when the bear market arrives, we may face a huge negative funding situation, possibly below -10%. Currently, the prices of BTC and ETH are above the buying prices of various micro-strategy companies, and we can't see much yet. However, once they fall below their holding prices, it is very likely to trigger a chain reaction of liquidations.
Referring to the funding rate situation of SOL after the explosion of FTX, we have reason to believe that at some point in the future, the funding rate will look very bad. At that time, USDe will face a bank run and collapse instantly. I am quite pessimistic about the USDe model; it is merely an upgraded version of algorithmic stablecoins. Back then, UST was betting on the price increase of Luna, while USDe is betting on the funding rate remaining positive. They are both examples of stepping on the left foot while lifting the right foot to the sky, but in the end, they will definitely fall off the roof first.
In the financial market, such good things as rising prices will not be maintained forever; anything with left foot stepping on the right foot behavior should not be touched. It is recommended to replace USDe as soon as possible; a gentleman does not stand under a dangerous wall.
As for USDT and USDC, the old stablecoins, one can rest assured; they have reached a point of being too big to fail.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.