XRP Positioned to Soar as Bitcoin and Ethereum’s Tether Bubble Bursts: SMQKE

A crypto analyst identified as SMQKE has disclosed that XRP could seize an opportunity to soar once Bitcoin's (BTC) and Ethereum's (ETH) Tether

A crypto analyst has predicted that XRP will soar as Bitcoin’s and Ethereum’s Tether bubble bursts.

The analyst, known as SMQKE, highlighted in a post to his 14.7k followers how Tether issues more USDT without sufficient reserves, which inflates the price of Bitcoin and Ethereum. According to him, the backing of the stablecoin issuer could certainly be exposed and result in a devastating collapse of Bitcoin, Ethereum, and other cryptos that rely on its liquidity.

This speculation surfaced on the internet years ago, forcing Tether to clarify that sufficient reserves back it. However, Edul Patel, chief executive of crypto investment platform Mudrex, objected to this assurance, citing that its liquidity pools show an elevated supply of Tether.

SMQKE backed his statements with a research paper confirming that Tether appears to feed the Bitcoin bubble. The 2020 Bank of France research paper, “Stablecoins: A Brave New World?” focused on the relationship between increased Tether’s liquidity and the surge in Bitcoin price in late 2017 and early 2018.

The research paper cited a 2017 story stating that the issuer of Tether, who also owned the Bitfinex exchange, allegedly exploited the inflation in the price of Bitcoin to replenish its dollar reserves. It did not hold the dollar equivalent reserves needed to guarantee all the Tether issued.

The research paper also confirmed the detection of the bubble in Bitcoin and Ethereum while concluding that no bubble was detected in XRP due to Ripple’s technological superiority.

According to SMQKE, XRP’s stability makes it a more reliable asset, especially as Bitcoin and Ethereum have been predicted to fall out. Per his observation, Ripple’s upcoming stablecoin on the XRP Ledger would have an edge over USDT in terms of regulatory compliance and transparency. He also believes that this would gradually reduce USDT’s dominance and take charge of the stablecoin market.

Aligning with this prediction, Ripple boss Brad Garlinghouse recently predicted that XRP could replace Bitcoin if certain challenges are addressed. However, this possibility has been heavily debated, with some analysts arguing that Bitcoin has the first-mover advantage and appears more decentralized than XRP.

Regardless, XRP has edges in different areas, including transaction throughput. While Bitcoin processes about seven transactions per second, Ripple boasts of 1,500 TPS.

At press time, XRP was trading at $0.6 after surging by 6% in the last seven days.