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This Metric Hinted At The Bitcoin Retrace In Advance

The trend in the total supply of the stablecoins may have hinted in advance that the Bitcoin rally wouldn’t last too long.

Bitcoin Stablecoins Supply Hasn’t Moved Much Recently

An analyst in a CryptoQuant Quicktake post explained that the latest news has been unable to make the stablecoins supply budge. The “stablecoins supply” here refers to the total circulating supply of all stablecoins in the sector.

Generally, investors use stables to escape the volatility associated with most coins in the rest of the cryptocurrency sector. Thus, whenever this metric rises, new tokens of the stablecoins are being minted because there is a demand for converting to them from the other assets or fresh demand is coming into the market.

Such investors who seek safety in these fiat-tied tokens usually do so because they don’t want to exit the cryptocurrency sector completely; they only require a temporary place to station their capital.

When these holders eventually find that the prices are right to jump back into the volatile coins like Bitcoin, they swap their stablecoins into them, thus putting buying pressure on their prices.

Now, here is a chart that shows the trend in the stablecoins supply over the past year:

Stablecoins Supply vs Bitcoin

In the graph, the quant has marked a specific correlation between the Bitcoin spot price and the stablecoin supply. It would appear that all the major increases in the former during the past year have come following rises in the latter metric.

There are three instances of this trend in this period: the first formed before the January rally, the second before the March rebound, and the third before the June surge.

From the chart, it’s apparent that the price increase in the asset wasn’t caused by the increases in the supply of the stables but rather the decline in them that followed afterward.

The increases in the supply of the stablecoins likely occurred because of fresh capital injections. When this new capital was deployed into Bitcoin and the others (when the indicator declined), the assets obtained the fuel for their rallies.

With the most recent rally in the asset instigated by the news of Grayscale’s victory against the US SEC, there was no such pattern in the supply of these fiat-tied assets.

This may have been one of the early signs that the rally wasn’t backed by constructive market growth, as the stablecoins supply has only been moving sideways. The Bitcoin retrace below the $26,000 level may have only been a natural consequence of this weak structure.

BTC Price

Bitcoin had earlier fully retraced the gains of the Grayscale rally, but it would appear that the decline isn’t over just yet, as the asset has now gone below the $26,000 level it had been at before the surge.Bitcoin Price Chart

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Crypto Adoption: Singapore Red Cross To Accept BTC, ETH, USDT, And USDC

Cryptocurrency payments have been increasingly widespread in recent years, with their use spreading to nearly every market. A use case of cryptocurrencies that has seen particular growth is in crypto donations and the Singapore Red Cross has now taken the plunge.

Singapore Red Cross Taking Crypto Donations

The Singapore Red Cross is the latest to jump on the crypto bandwagon as the homegrown humanitarian organization recently partnered with Triple-A, allowing donors to contribute Bitcoin (BTC), Ether (ETH), Tether (USDT), and USD Coin (USDC). 

The country’s Red Cross Society is looking to capitalize on crypto adoptions by partnering with Triple-A, the first crypto payment gateway licensed by the Monetary Authority of Singapore (MAS). 

The Singapore Red Cross received more than $4.5 million in donations in 2022. However, by accepting BTC, ETH, USDT, and USDC, the humanitarian organization is opening itself up to donations from people across the globe. 

“By accepting digital currencies, we open our doors to a new segment of donors who are tech-savvy and wish to make a difference through their digital assets,” said Benjamin William, Secretary General and CEO of the Singapore Red Cross. “Enabling cryptocurrency donations also opens more opportunities for the new generation of donors who are au fait with digital currencies to consider philanthropy and helping the vulnerable.”

This is not the first time a Red Cross society will accept cryptocurrency donations, as the American and British counterparts already accept crypto donations. However, unlike US donors, donors to the Singapore Red Cross do not receive tax deductions, and all donations received will be converted to fiat currency within one business day.

Crypto total market cap chart from Tradingview.com (Red Cross)

Crypto adoption in Singapore is one of the highest in the Asia-Pacific region. According to a report, over half of Singapore’s Gen X members invest in cryptocurrencies. Another similar study done by Statista showed that around 19% of people in Singapore own crypto, higher than the global average of 15%. More than 31% of respondents also indicated that they owned Bitcoin, one of the highest in the world.

The Rise of Crypto Philanthropy

Crypto philanthropy has steadily grown over the past few years. Major organizations like the American Red Cross, and St. Jude Children’s Research Hospital now take crypto donations. Crypto donations, in particular, have contributed a significant part of humanitarian efforts in the Ukraine war, with the country receiving more than $212 million worth of crypto.

A 2022 report found that USDC, USDT, and Ethereum are the most popular cryptocurrency used for donations. With the improved infrastructure to accept and manage crypto donations, charitable giving is expected to become more mainstream, reaching $10 billion by November 2032.