Bitwise isn’t alone in its bullishness on stablecoins with Circle CEO Jeremy Allaire predicting the explosive growth of the sector due to a “huge appetite” for digital dollars.
The Tether Killer? A True Stablecoin Would Enhance Banking and Crypto
Bitcoin Rushes To Exchanges, But This Sign Remains Positive For The Bulls
On-chain data shows an increasing trend of Bitcoin moving to exchanges, a typical bearish sign, but another signal still remains optimistic for the bulls.
Bitcoin Exchange Inflows Are Up, But So Are USDT Deposits
According to data from the on-chain analytics firm Santiment, BTC has been flowing into exchanges recently. The relevant indicator here is the “supply on exchanges,” which keeps track of the percentage of a cryptocurrency’s total circulating supply that’s currently sitting in the wallets of all centralized exchanges.
When the value of this metric goes up, it means that the investors are making net deposits of the asset into these platforms, while a decline implies outflows are taking place.
What effect either of these trends might have on the market depends on the type of cryptocurrency in question. Santiment has shared the below chart, which shows how the supply on exchanges has recently changed for four assets: Bitcoin, Ethereum (ETH), Tether (USDT), and USD Coin (USDC).
As displayed in the above graph, the Bitcoin and Ethereum exchange supplies had both been on the decline earlier, but recently, BTC has diverged from this downtrend and registered some net deposits.
These deposits first started after BTC finished its rally to $44,000 and took to sideways movement. Generally, one of the main reasons why holders might deposit their coins to exchanges is for selling purposes, so these recent inflows can be a sign that selling has been taking place.
The uptrend in the supply on exchanges also became a bit sharper in the leadup to the asset’s latest plunge, suggesting that the inflows have indeed been adding to the selling pressure.
From the chart, it’s also visible that the Bitcoin supply on exchanges hasn’t yet reversed its trend, a potential indication that selling hasn’t completely exhausted yet.
Meanwhile, Ethereum has continued to see supply exit these central entities, implying that investors of the cryptocurrency are possibly still participating in net accumulation.
Something that could prove to be positive for BTC, though, is the fact that the Tether supply on exchanges has risen since the plunge. Investors usually make use of stablecoins like USDT and USDC whenever they want to escape the volatility associated with coins like BTC and ETH, but such investors generally only do this as a temporary measure.
When the holders plan to leave the cryptocurrency sector as a whole, they do so through fiat instead. Opting for stablecoins instead, thus, means that they intend to stay in the market and possibly eventually return back towards the volatile side.
Sizeable swaps from stables into Bitcoin and others can naturally provide a buying boost to their prices, so exchange inflows of them can be a bullish sign for these volatile assets.
The most bullish combination is when BTC rallies while the USDT exchange supply does the same, as such a trend suggests that fresh capital is entering into the sector.
In the current case, the Tether exchange supply has gone up at the expense of BTC’s price, so only a rotation of capital has occurred. Nonetheless, the fact that not all capital has exited the sector as a whole can still be an optimistic sign for the rally’s return.
BTC Price
Bitcoin had plunged towards $40,000 yesterday, but the coin has already made some swift recovery as it’s now trading around the $41,700 level.
Bitcoin Rushes To Exchanges, But This Sign Remains Positive For The Bulls
On-chain data shows an increasing trend of Bitcoin moving to exchanges, a typical bearish sign, but another signal still remains optimistic for the bulls.
Bitcoin Exchange Inflows Are Up, But So Are USDT Deposits
According to data from the on-chain analytics firm Santiment, BTC has been flowing into exchanges recently. The relevant indicator here is the “supply on exchanges,” which keeps track of the percentage of a cryptocurrency’s total circulating supply that’s currently sitting in the wallets of all centralized exchanges.
When the value of this metric goes up, it means that the investors are making net deposits of the asset into these platforms, while a decline implies outflows are taking place.
What effect either of these trends might have on the market depends on the type of cryptocurrency in question. Santiment has shared the below chart, which shows how the supply on exchanges has recently changed for four assets: Bitcoin, Ethereum (ETH), Tether (USDT), and USD Coin (USDC).
As displayed in the above graph, the Bitcoin and Ethereum exchange supplies had both been on the decline earlier, but recently, BTC has diverged from this downtrend and registered some net deposits.
These deposits first started after BTC finished its rally to $44,000 and took to sideways movement. Generally, one of the main reasons why holders might deposit their coins to exchanges is for selling purposes, so these recent inflows can be a sign that selling has been taking place.
The uptrend in the supply on exchanges also became a bit sharper in the leadup to the asset’s latest plunge, suggesting that the inflows have indeed been adding to the selling pressure.
From the chart, it’s also visible that the Bitcoin supply on exchanges hasn’t yet reversed its trend, a potential indication that selling hasn’t completely exhausted yet.
Meanwhile, Ethereum has continued to see supply exit these central entities, implying that investors of the cryptocurrency are possibly still participating in net accumulation.
Something that could prove to be positive for BTC, though, is the fact that the Tether supply on exchanges has risen since the plunge. Investors usually make use of stablecoins like USDT and USDC whenever they want to escape the volatility associated with coins like BTC and ETH, but such investors generally only do this as a temporary measure.
When the holders plan to leave the cryptocurrency sector as a whole, they do so through fiat instead. Opting for stablecoins instead, thus, means that they intend to stay in the market and possibly eventually return back towards the volatile side.
Sizeable swaps from stables into Bitcoin and others can naturally provide a buying boost to their prices, so exchange inflows of them can be a bullish sign for these volatile assets.
The most bullish combination is when BTC rallies while the USDT exchange supply does the same, as such a trend suggests that fresh capital is entering into the sector.
In the current case, the Tether exchange supply has gone up at the expense of BTC’s price, so only a rotation of capital has occurred. Nonetheless, the fact that not all capital has exited the sector as a whole can still be an optimistic sign for the rally’s return.
BTC Price
Bitcoin had plunged towards $40,000 yesterday, but the coin has already made some swift recovery as it’s now trading around the $41,700 level.
Societe Generale-Backed Euro Stablecoin EURCV Starts Trading on Bitstamp
The listing marks the first time a euro stablecoin issued by a fully regulated bank is available on a cryptocurrency exchange.
Flowdesk Picked by Forge to Become Marker Marker for Euro-Based Stablecoin
EURCV isn’t the first Euro stablecoin, but it has the institutional backing of Societe Generale, a major European financial institution.
Stablecoin Issuer Paxos Plans New U.S. Dollar-Backed Token for Singapore Operations
Paxos, a cryptocurrency brokerage firm, has received a preliminary license from regulators to offer digital payment token services in Singapore, the company said Wednesday in a statement.
Crypto Market Sees Net Capital Inflow for First Time in 17 Months
The 90 day net change in the supply of the top four stablecoins has flipped positive, indicating an inflow of capital into the market.
Can Stablecoins Get Past Their Instability?
Stablecoins ‘not a safe store of value’: BIS
“Not one of the stablecoins assessed in this paper has been able to maintain their closing prices in parity with their peg,” wrote the Bank for International Settlements.
BIS Researchers Say Stablecoins Are Failing to Live Up to Promise
For stablecoins to be able to be used as a means of exchange they should be able to maintain their value during the day, economists at the Bank for International Settlements said.
UK’s Tough Crypto Regulator FCA Won’t Go Easy on Stablecoins, Official Says
The Financial Conduct Authority (FCA) on Monday published a discussion paper with proposals for a stablecoin regime. Though the country’s Conservative government has said it wants the U.K. to be a crypto hub and has managed to push through legislation that lets stablecoins be regulated as a means of payment, the FCA has been a strict regulator and it will do most of the supervision work involving the broader crypto sector.
U.S. Federal Reserve’s Barr Holds Line on Central Bank Needing Stablecoin Powers
Vice Chairman Michael Barr argued that the Fed needs regulatory and enforcement authority over stablecoin issuers – a point of contention in the debate over legislation.
Circle Curbs Stablecoin Minting for Retail Users, Moving Closer to Tether’s Practice
USDC issuer Circle Internet Financial said it is curbing support for individual consumer accounts to mint stablecoins, with currently only accepting qualified institutional clients.
Tether Reports $3.2B Excess Reserves, but Lags in Reducing Secured Loans
Tether reported $3.2 billion of excess reserves backing the value of its stablecoins including USDT, according to its Q3 attestation released Wednesday.
Drawbacks of Stablecoin Cross-Border Use Outweigh Benefits: Global Payments Watchdog
Existing stablecoins aren’t fully compliant with relevant regulatory requirements, a report by the Committee on Payment and Market Infrastructures said.
Tokenized U.S. Treasury Market Grows Nearly 600% to $698M as Crypto’s RWA Race Intensifies
Tokenized versions of U.S. Treasuries grew nearly seven-fold so far in 2023 as competition between investment offerings and blockchain venues intensified.
UK Publishes Final Proposals for Crypto, Stablecoin Regulation
The U.K. government published its final proposed rules for crypto and stablecoins on Monday.
Despite U.S. House Gridlock, Senator Gillibrand Bullish on Stablecoin Bill, Illicit Finance Legislation
Even as the U.S. House of Representatives is paralyzed by a Republican leadership drama, U.S. Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) are still pressing to get crypto legislative through.
Tokenized RWAs Could Grow to a $10T Market by 2030 as Crypto Converges to TradFi: Report
The market for tokenized real-world assets could grow to $10 billion by 2030 as crypto is maturing and increasingly integrates with existing financial plumbing, crypto asset management firm 21.co said in a report.