Glassnode: Bitcoin price to rebound as supply of four major stablecoins in circulation hits new high

Tether, USD Coin, Binance USD and Dai now have a combined market cap of over $78 billion.

The circulating supply of the four major stablecoins has soared to a new all-time high, suggesting that buyers may soon drive the bitcoin and cryptocurrency markets higher again.

The combined market capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) has soared nearly 190% to $78 billion from $27 billion earlier this year.

In its May 3 weekly on-chain report, on-chain analytics provider Glassnode noted that Tether is firmly in the lead of the stablecoin space, with two-thirds of the total market cap of the four largest stablecoins. mint supply of USDT increased by $1.48 billion (3%) in just seven days, reaching an all-time high of $51.78 billion at the end of last week.

According to CoinGecko, supply of USDC has also increased by about $1 billion over the past week, and the current market cap stands at $14.6 billion. on April 30, USDC’s market cap briefly touched a peak of $15 billion.

On May 3, BUSD’s circulating supply reached a record $7.8 billion, while DAI’s circulating supply reached a record $3.9 billion at the time of writing.

With the surge in supply of the four major stablecoins, Glassnode notes that the Bitcoin Stablecoin Supply Ratio (SSR) is at a year-to-date low of 13.4 and is approaching its all-time low of 9.6, SSR is a measure of Bitcoin supply divided by stablecoin supply.

Coin World – Glassnode: Bitcoin Price to Rebound as Supply of Four Major Stablecoins in Circulation Hits New Highs

Glassnode: Bitcoin price to rebound as supply of four major stablecoins in circulation hits new high

Bitcoin Stablecoin Supply Ratio: Glassnode

As you can see from the chart, the SSR has been low during 2020 and 2021 as stablecoin supply is proportional to the rise in bitcoin prices.

According to Glassnode, the decline in SSR values is a bullish signal that global stablecoin supply is becoming larger relative to bitcoin market cap.

“As the total supply of stablecoins increases, it indicates an increase in the ‘purchasing power’ of crypto-native capital, which can be achieved quickly and can be traded for bitcoin and other crypto assets.”
Aave’s liquidity mining incentive program launched on April 27 will also boost demand for stablecoin, as most of the rewards are targeted at pledges of USDT, USDC and DAI. deFi investors have observed that Aave’s liquidity mining has had a direct impact on the volume of stablecoin borrowing. Borrowing volume for stablecoin has more than doubled since the end of April.

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