USDC brings stability to cryptocurrency. It would behoove the financial system if policymakers took measures to foster its adoption.
EU Could Veto Large Stablecoins During MiCA Approval Process, Regulator Signals
The European Banking Authority doesn’t want private crypto initiatives to threaten monetary policy privileges
Circle reportedly adjusts USDC reserves to avoid US default risk
The world’s second-largest stablecoin issuer wants to reduce its exposure to potential US debt defaults.
Tether Reports $1.48B Profit in Q1, Reveals Bitcoin, Gold Reserves
The company’s USDT stablecoin has seen rapid growth this year as the U.S. banking crisis hit rivals.
In the ‘Stablecoin Olympics,’ No Winner Will Take All
Number of Stablecoins Held on Exchanges Slips to 2-Year Low
While the stablecoin exchange balance has dropped 44% this year, bitcoin’s price has rallied by 70%.
The U.S. Should Lead the Digital Future of Money
In his speech to CoinDesk’s Consensus festival yesterday, the head of the non-profit Digital Dollar Project says a U.S. central bank digital currency is too important to be left to central bankers to design. Money is a social issue requiring broad-based public engagement.
Stablecoin Reserves Need to Be Diverse, EU Bank Agency Chief Says
The EBA’s José Manuel Campa urged crypto players to start managing risks right away as new norms bed in.
Circle Unveils New Method for Moving USDC Between Blockchains
The cross-chain transfer protocol seeks to improve liquidity of the major crypto payments rail.
USDC Stablecoin Strengthened by U.S. Banking Crisis in March, Circle CEO Says
The stablecoin has upgraded its market infrastructure after losing its peg during the crisis.
Introducing CoinDesk’s ‘Consensus at Consensus’ Project
Intimate group discussions at Consensus 2023 will seek solutions to the crypto industry’s thorniest challenges.
Stablecoins must be programmable to counter CBDCs
Decentralization enables programmability — and that allows stablecoins to wield a key advantage over central bank digital currencies.
House Republicans Make Case on Stablecoin Bill After Democrats Called for Do-Over
Republicans on the House Financial Services Committee are taking another swing at stablecoin legislation with a discussion draft revealed Monday afternoon, which may mark a new starting point for negotiations with Democrats.
Bitcoin ‘ESR’ Continues To Show Bullish Divergence, Will Price Follow?
Bitcoin on-chain indicator Exchange Stablecoin Ratio (ESR) has continued to show bullish divergence recently. Will the price also mimic this?
Bitcoin ESR Has Continued To Sharply Ascend In Recent Weeks
As explained by an analyst in a CryptoQuant post, the ESR is currently acting as a leading indicator for BTC’s price. A relevant metric here is the “exchange reserve,” which measures the total amount of a cryptocurrency that’s currently sitting in the wallets of all centralized exchanges.
The “ESR” is an indicator that tells us about the ratio between the exchange reserve for Bitcoin and that for the combined stablecoins market (both denominated in USD).
Generally, investors shift assets like BTC into stables whenever they want to escape the volatility associated with the former. When holders like these eventually want to switch back into the volatile markets, they deposit their stablecoins into exchanges to do so.
The coins they exchange their stables for naturally feel a buying pressure from the conversion. Because of this reason, the stablecoin exchange reserve may be looked at as the “available buying power” for other cryptocurrencies like BTC.
The exchange reserve for Bitcoin itself, however, represents the selling supply in the market, as investors generally deposit their BTC into these platforms for selling purposes.
Now, here is a chart that shows the trend in the BTC ESR over the last year:
According to the quant, the Bitcoin price and ESR were showing convergence during the year 2021, meaning that the two curves were moving in close tandem. This convergence continued in early 2022, as the chart above displays.
However, the convergence broke with the 3AC bankruptcy in June of that year, as the price of the asset plummeted, but the ESR didn’t register any significant fluctuations at all.
In late 2022, a positive divergence started forming between the two lines, as the ESR began to climb while Bitcoin continued to move sideways around the post-FTX crash lows.
In January of this year, the BTC price also finally started following in the direction of the indicator, as it began its rally. The ESR has continued to sharply climb since then, while BTC has also generally observed strong upwards momentum.
An interesting trend was seen back at the beginning of March when the ESR had taken a plunge. Not too long after this drawdown in the indicator occurred, the BTC price also plummeted down.
But while this decline in the price was happening, the metric had already reversed back to an uptrend. As it turned out, the cryptocurrency also did the same after finishing its drop. “In the current market structure, ESR acts as a magnet to Bitcoin’s spot price,” explains the analyst.
Earlier this month, the ESR again observed some decline, but it wasn’t long before the metric reversed its trend and resumed the upward trajectory. Recently, BTC has also been plunging, as its price has now gone below the $28,000 level.
If the pattern that followed earlier is anything to go by, this divergence between the two lines should mean that BTC will also reverse its current decline, in order to mimic what the ESR has been doing.
BTC Price
At the time of writing, Bitcoin is trading around $27,600, down 6% in the last week.
Is Europe’s MiCA a Template for Global Crypto Regulation?
Formally enacted today, the EU’s Markets in Crypto-Assets Regulation is the most comprehensive framework of its kind. How will it influence how non-EU states regulate digital assets?
Democrats Blast Draft Stablecoin Bill in First 2023 Hearing on Issue
Despite Republican House committee leaders publishing a draft bill and talking about progress, it hasn’t been on the bipartisan level required for an eventual law, lawmakers said in a hearing Wednesday.
The Big Issues of Stablecoin Issuance
Here are the key issues as the House Financial Services Committee hears testimony about stablecoin regulation.
What’s in the House Financial Services Committee’s Stablecoin Bill?
The House Financial Services Committee has finally unveiled its stablecoin legislation, proposing a framework for stablecoin issuers such as Circle and Tether to define how their offerings can be regulated by state and federal entities, while calling for a temporary ban on algorithmic stablecoins.
BoE Considers Limits on Stablecoin Payments as Parliament Debates New Crypto Rules
The Bank of England plans on releasing a consultation proposal by the end of the year, Jon Cunliffe said at Innovate Finance’s annual global summit.
Centralized Stablecoins Are Problematic. Is a Decentralized Alternative on the Way?
USDC and USDT both have issues that truly decentralized, blockchain-based protocols are designed to solve.