Bloomberg Crypto Strategist Predicts Significant Ethereum Impact from PayPal's USD Stablecoin
Bloomberg Intelligence Analyst Jamie Coutts Foresees Significant Ethereum Impact from PayPal's PayPalUSD (PYUSD) Stablecoin
Coutts Highlights Enormous Growth Opportunity for Ethereum Through Adoption of PayPal's Stablecoin
According to Coutts, Ethereum holds vast growth potential, even with a minor portion of PayPal's extensive customer base embracing the stablecoin. Designed to maintain a 1:1 peg with the US dollar and established on the Ethereum platform, this stablecoin could bring substantial transformations.
"The impact of PayPal's announcement is not yet fully accounted for. With 435 million active PayPal accounts compared to Ethereum's 1 million active addresses across Layer-1 and Layer-2, the conversion of a mere 1% into PYUSD (approximately 4.35 million users) could usher in profound consequences for both the Ethereum ecosystem and the ETH asset," Coutts explains
Coutts Expresses Optimism for Ethereum Layer-1 (L1) Smart Contract Platform Following Positive L2 Project Expansion Outcome
Coutts further emphasizes his positive stance on the Ethereum layer-1 (L1) smart contract platform, given that the expansion of layer-2 (L2) projects had a more favorable impact on ETH's financials than initially anticipated.
"The unexpected combination of accelerated L2 adoption and a lesser-than-expected impact on L1's financials bolsters our belief in Ethereum's capability to gather greater value throughout the cycle compared to alternative L1 solutions," Coutts affirms.
Coutts Observes Ethereum Network's Revenue Surges 3x from Q4 2022 Levels
"Considering different perspectives, the network's GDP/revenue in dollar terms, although notably lower than 2021, has surged by 3 times since the low point of Q4 2022, now surpassing the price trend. Ethereum's layer-1 (L1) is currently generating around $6 million in daily fee revenue, with 80% being utilized for burning (buyback) and the remainder allocated to validators (dividend distribution)."
He also highlights that the fee surge resembles a pattern from 2020 that contributed to an Ethereum bull market.
"In 2023, fees have soared by 176%, compared to a 53% price increase. This correlation draws parallels with the prior bullish phase, where fees outpaced the price in 2020 following a two-year decline."
At the time of writing, Ethereum is being traded at $1,850, reflecting a minor 0.1% decrease over the past 24 hours.
Aug 11, 2023