- The growing presence of stablecoins in this movement is very encouraging for cryptocurrency investors.
- As with previous rounds, stablecoin supply is likely to expand significantly to meet demand and liquidity needs.
Stablecoin Wallet Countries with non-zero balances are growing rapidly, Santiment This was observed in a post by X. This phenomenon continued to occur despite concerns over impending selling pressure following the halving spiking over the past three weeks.
Bitcoin price fluctuations [BTC] Ethereum [ETH] The past week has been much stronger than the latter half of April. What else do stablecoins reveal about the state of the market?
Stretching purse strings indicate purchasing power
sauce: X’s Santiment
In the post, Santiment noted that USDC non-empty wallets will grow by 13.9% and Tether wallets will grow by 15.7% in 2024. These are impressive numbers and mirror the rapid growth during the last bull run.
Since December 2019, the total number of USDT non-zero wallets has been growing rapidly for about three years until October 2022. Since then, the metric has seen a sharp decline and a gradual upward trend.
This upward trend is set to accelerate in November 2023, signaling that people who weren’t interested in crypto are feeling greater FOMO than ever before and are more motivated to get involved – a positive sign for the industry as a whole.
Foreign exchange reserves did not reflect the previous bull market
sauce: Cryptoquant
Throughout 2020 and 2021, the rapidly growing cryptocurrency market has necessitated the issuance of massive amounts of USDT and other stablecoins.
of Total supply of stablecoins It grew from $3.5 billion in February 2020 to $99 billion in March 2022. It then fell to $67 billion due to a market contraction, but has since started to rise again.
Exchange reserves reflect supply and have been slowly growing over the past 12 months, and if this scenario plays out, this growth may need to accelerate to replicate the previous bull run and keep up with the next cycle of rapid growth in cryptocurrency market capitalization.
USDT.D. Source: TradingView
Tether’s dominance chart shows some similarities to previous halvings: as highlighted by the light blue box, the past halving saw its dominance drop for just over two months after the event, before rising again in August 2020.
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A drop in USDT dominance means that the overall crypto market price movement is bullish, while an increase in dominance indicates that investors are fleeing to stablecoins, putting bearish pressure on the market.
If the similarities continue, we may see a sharp drop across the cryptocurrency market in early July, just six weeks later.
