Stablecoins Reserve Hits A New ATH, What Does It Mean For Bitcoin’s Price?

On-chain data shows stablecoins reserve has hit a new all-time-high (ATH), here’s what it could mean for Bitcoin’s price based on past patterns.

Stablecoins All Exchanges Reserve Achieves New ATH

As pointed out by a CryptoQuant post, the all exchanges stablecoins reserve has spiked up and reached a new ATH. Past pattern of the indicator might help predict how Bitcoin’s price will move next.

The all exchanges stablecoins reserve is a metric that measures the amount of stablecoins present on all centralized exchanges.

When the value of this indicator goes up, it means more stablecoins are being sent to exchanges for buying other coins like Bitcoin, or investors are withdrawing from volatile markets into fiat.

A downtrend in the stablecoins reserve would imply these coins are being transferred to personal wallets or being converted to other crypto like BTC.

Related Reading | Despite Drop To $47k, Coinbase Observes 31k Bitcoin Outflow. Bull Rally Still On?

Now, here is a chart that will reveal how the all exchanges stablecoins reserve lines up against the BTC price:

The all exchanges stablecoins reserve shoots up | Source: CryptoQuant

On examining the above graph, two interesting features become apparent. The first one is that the stablecoins supply seems to shoot up when Bitcoin’s price hits a bottom.

The behavior makes sense as keen investors would want to change their positions in the market in reflection to the downtrend in the price.

Related Reading | Puell Multiple: The Bitcoin Metric That Says BTC Miners Aren’t Ready To Sell

The other feature is that soon after the spike happens, the stablecoins reserve starts declining and BTC’s price starts moving up.

This trend has happened twice so far in this month. If it’s indeed a pattern, then Bitcoin’s price should move up now, at least in the short-term, as the indicator is showing a huge spike at the moment.

BTC Price

At the time of writing, Bitcoin’s price is around $46.9k, up 2.5% in the last 7 days. Over the past month, the cryptocurrency has accumulated 22.8% in gains.

The below chart showcases the trend in the price of BTC over the last 5 days:

Bitcoin’s price continues to fall downwards | Source: BTCUSD on TradingView

Yesterday, BTC started a very sharp uptrend as the cryptocurrency went from $47k to $49k by earlier today. However, soon after that the crypto sharply dropped in price before it could retest the $50k level. This time. the value touched down to as far below as $46k.

The price action would suggest at least a short-term bear market, but if the stablecoins reserve pattern holds true, Bitcoin’s value could soon lift up as investors use these fiat-tied coins to buy the BTC dip.

Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com

Crypto Company Circle Seeks To Become Global Digital Currency Bank

The company behind the increasingly popular USDC stablecoin dreams big. Circle wants to leverage its know-how and good reputation to become “a global digital currency bank.” That means it’s also looking into becoming a digital currency bank in the US. Their plan’s announcement focused on that region of the planet, but the wording makes it clear that they’re ultimately looking for worldwide domination. 

Related Reading | Is USDC’s Billion Dollar Growth A Sign Crypto Smart Money Is Ditching Tether?

According to Coindesk, “this would be an industry first, with a scope far beyond the OCC banking charter already conditionally issued to Anchorage, Paxos and other crypto-native financial services firms.” The company’s aim is to provide “frictionless, instant and nearly free payments that combined fiat reserve currencies with open, permissionless blockchains, and eventually building on these open networks to support new forms of capital formation and intermediation.” 

It’s the project ready for prime time or in its infancy? Did they file the documents already? Will they be able to pull this off? Keep reading for extra clues and info.

USDC price chart for 08/10/2021 on Bitbay | Source: USDC/USD on TradingView.com
Circle Played Nice With Governments From The Get-Go 

The USDC stablecoin is issued by CENTRE, a joint venture between Circle and Coinbase. Their aim is “to conform with stringent U.S. money transmission supervisory and regulatory standards.” In contrast Tether, their main competition, is famous for the probe that the US Department Of Justice launched against them.

The main point of contention against Tether is the reserves they hold to back up their USDT. Attacking their competition’s weak spot, Circle claims, “Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.” 

Since regulatory compliance is their forte, Circle spends half of their announcement praising their own transparency and USDC’s liquidity even “in times of intense demand to redeem USDC”. To prove that, they provide an independent accountant report that highlights the “composition of USDC reserves, including the credit quality of the underlying assets.”

Related Reading | Tether (USDT) To Face Do or Die Situation in 2021: Messari Report

Why does all of that have to do with their plans to become a national digital currency bank? It proves that they’re in tune with the US Government. 

Now, with USDC at more than $27.5 billion in circulation, and building on our long-standing commitment to trust, transparency and accountability in the dollar-denominated reserves backing USDC, we are setting out to become a U.S. Federally-chartered national commercial bank.
Circle intends to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, OCC, and the FDIC.

Other Big Plans For The Crypto Company

Recently, Circle announced its intention to go public before the end of the year. According to Coindesk, the company “partnered with a special purpose acquisition company (SPAC) to go public later this year. The deal valued Circle at $4.5 billion.” Also, their USDC project will soon go live in multiple blockchains. As NewsBTC informed:

It will soon be available in, “Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos, and Tron.” That will bring the total to 14; since USDC is already functional in Ethereum, Algorand, Stellar, and Solana.

In related news, NewsBTC recently highlighted a Messari report that shows USDC is the most used stablecoin in DeFi.

From what Ryan Watkins, a credible researcher, predicted, the stablecoin share for Tether on Ethereum could dip below 50%. In addition, Watkins revealed that more than half of USDC’s total supply is now in smart contracts.

The equivalent value for this USD Coin supply is about $12.5 billion. According to Messari, CoinMetrics data estimates show that USDC’s stablecoin supply is over 40% on Ethereum.

However, none of that guarantees that their plans to become a global digital currency bank will come true. Keep the NewsBTC tab open for further information on this developing story.

Featured Image by Chaitanya Tvs on Unsplash – Charts by TradingView

New SEC Regulations Add Cryptocurrency Under Security-Based Swap Rules

The cryptocurrency industry might soon be flooded with different kinds of rules to checkmate its operations. The recent developments in the sector point towards a new SEC rule that will guide the security swaps occurring in many financial assets, including crypto.

This information came from the SEC Chairman during a speech he gave to the American Bar Association Derivative & Future Law Committee.

While speaking, Gary Gensler outlined the changes that will take place on security-based swaps in 2022. According to Gary, these changes will ensure that transparency exists in such transactions and reduce the risks associated with the market.

Related Reading | Vitalik Buterin Urges Ethereum To Grow Beyond DApps

The new requirements will take off in November and include internal risk management, new counterparty protections, new capital & margin requirements, trade acknowledgment & confirmation, record keeping & reporting procedures, and supervision & Chief compliance officers. In addition, from February 2022, the SEC will mandate swap data repositories to publicize data about individual transactions.

Due to these rules, Gary mentioned that he had asked staff to embrace ways that can increase transparency & reduce risk using authorities, especially for security-based SEFs & Position reporting.

Before closing the speech, the SEC Chairman mentioned that the cryptocurrency sector would be a part of the trade reporting rules for security-based swaps. He stated that operators must register every offer or sale under the “Securities Act of 1933.”

The crypto market is trading sideways as the bulls and bears fight | Source: Crypto Total Market Cap on TradingView.com

Moreover, Gary stated that the Commission is ready to utilize every tool at its disposal in protecting investors.

Cryptocurrency Regulations Are Gaining Momentum

There has been a lot of talks around crypto regulation. Many of the agencies in the United States has been pushing for the regulation of the sector.

On one occasion, the Federal Reserve Chairman declared earnestly that there should be a stringent regulation for assets like stablecoins.

Related Reading | American Banks Encouraged To Partner with Cryptocurrency Firms

He also went to Congress last week to discuss the need for creating a digital US dollar. In addition, a new bill on Congress aimed to provide a legal definition for digital assets and reduce the unfounded fears of regulating blockchain-based tokens.

There was also a meeting about a possible regulation for stablecoin. This meeting was held by the Working Group of Financial Markets, who revealed that they want to release recommendations in a few months to come on how Stablecoins will be regulated.

So, the issue of cryptocurrency regulation continues to rise, and many government agencies seem to support the idea.

Featured image from Pixabay, chart from TradingView.com

As Bitcoin Drops Below $30k, Stablecoins Surpass $100 Billion In Total Supply

Bitcoin has dropped below the $30k mark, while stablecoins go strong as they surpass over $100 billion in total supply.

Total Stablecoin Supply Is Now More Than $100 Billion

According to a report by Arcane Research, the total stablecoin supply has now surpassed the $100 billion mark, while Tether’s dominance is declining.

Here is a chart that shows the trend in the total supply and dominance of some popular coins:

Stablecoins Volume

The stablecoins total supply as reached a new height

There are a few interesting features in the graph. The total supply of these coins used to be only $11 billion in July of 2020, and now it seems to have risen $96 billion in the past 1 year, reaching about $107 billion today.

Tether (USDT) dominated the stablecoins market back then, accounting for 83% of the total market. But today it has declined to just 58% of the supply.

Related Reading | TA: Bitcoin Grinds Lower, Why BTC Bears Aim Larger Decline

On the other hand, the second-placed coin, USDC, has seen sharp growth, and it now accounts for 25% of the market. Nonetheless, Tether is still the most dominant crypto in this sector.

The company behind USDC, Circle, is currently in the process of going public with the help of a SPAC. In an investor presentation, the company revealed that they project USDC to rise to $83 billion by the end of 2022, and $194 billion by the end of 2023.

Binance USD (BUSD) places third after having overtaken DAI a few months back. BUSD has also seen some great growth over the past year.

While BTC continues its downtrend and dips below the $30k mark, 2 stablecoins have made their way into the top performers for the past week.

Related Reading | Billionaire Tim Draper Is Unfazed By Market Downtrend, Doubles Down On $250,000 Bitcoin Price Target

These two coins are Fei Protocol (up 0.82% in the last 7 days) and TerraUSD (up 0.08% in the past week). Here is a chart that shows how the the popular cryptocurrencies by market cap have performed in the same period:

Bitcoin % change in the last week

All the big coins seem to be down

As you can see in the above chart, Bitcoin and Ethereum seem to be deep in the red.

Bitcoin Price

At the time of writing, BTC’s price floats around $29.7k, down 9% in the past 7 days. Over the last month, the coin has dropped 14% in value.

Below is a chart showing the trend in Bitcoin’s price over the past 6 months:

Bitcoin Price

BTC continues its downtrend | Source: BTCUSD on TradingView

Bitcoin has finally dropped out of the $30k to $35k range that the coin has been stuck in for the past few weeks. It could mean more price action could be coming following a very stale market with minimal volatility.

Featured image from Pexels.com, charts from Arcane Research, TradingView.com