• Bloomberg analyst Jamie Coutts believes that PayPal’s launch of its own stablecoin has not been priced into markets yet, and will have a positive impact on Ethereum.
• Coutts notes that even a small amount of PayPal users converting to PYUSD will have massive ramifications for Ethereum.
• He also observes that the increase in Ethereum fees is higher than the price, which preceded the bull run of 2020.
PayPal Launching Stablecoin
PayPal recently announced their plan to launch their own stablecoin, called PYUSD. This new cryptocurrency is an ERC-20 token built on Ethereum’s blockchain network, meaning it can be used to make payments on the Ethereum platform.
Positive Effects on Ethereum
Bloomberg analyst Jamie Coutts believes that the introduction of this new cryptocurrency has not yet been priced into markets, and should yield positive results for Ethereum. Coutts notes that while PayPal has 435 million active accounts compared to Ethereum’s 1 million active addresses, if even just 1% convert a dollar balance to PYUSD it will have massive ramifications for the Ethereum ecosystem and ETH asset.
Ethereum Fees Outpacing Price
Coutts also points out that while prices for ETH are up 53%, fees have climbed 176%. This relationship between the two was seen in 2020 when fees outpaced prices after a two-year decline; something Coutts believes indicates that “Ethereum’s moat is deepening and widening”.
At time of writing, ETH is worth $1,839 USD.
With PayPal launching their own stablecoin and market participants discounting its potential effects on ETH prices, Bloomberg analyst Jamie Coutts predicts huge ramifications for Ethereum due to its large network size compared to other cryptocurrencies like Bitcoin or Litecoin. He also cites the divergence between fee income growth versus modest price increases as evidence of how far ahead of other blockchains Ethereum currently stands.