“Don’t vacation yet”: Stablecoin supply suggests Bitcoin and altcoins could rally further 🚨 This article is 4 years old...
“Don’t vacation yet”: Stablecoin supply suggests Bitcoin and altcoins could rally further
2 min read
Updated: Oct. 11, 2020 at 4:36 pm UTC
It’s clear that the bull trend that transpired in the summer is over: Bitcoin, Ethereum, and other top coins have entered a strong consolidation pattern over recent weeks. BTC, for instance, has traded in a $1,000 range for the past six weeks.
But investors don’t think now is the time to relax: a fund manager in the space, Andrew Kang, noted that it is not wise to take time off now. Kang, the founder of Mechanism Capital, noted that there is “a lot of cash on the sidelines” with an “appetite for risk for both BTC and alts.”
That’s to say, there’s money waiting to enter the cryptocurrency markets should there be a proper catalyst, be that a positive fundamental development or price trends indicating further growth will be had.
There's a lot of cash on the sidelines with an appetite for risk for both BTC and alts
Don't think it's time to sit in stables and go on vacation yet
— Andrew Kang (@Rewkang) October 8, 2020
Stablecoin supply surges, boosting Bitcoin & crypto prospects
The supply of U.S. stablecoins in circulation recently passed $20 billion despite this metric starting the year in the few billions.
This strong uptick in stablecoin demand shows at least two things:
- There is a demand for U.S. dollars to be deployed in the DeFi market.
- There is an underlying demand for cryptocurrencies.
Analysts are hopeful that the strong influx of stablecoins in circulation will increase the chances Bitcoin and other cryptocurrencies move higher. Historical analysis has found that the market capitalization of Tether’s USDT is somewhat correlated with the market capitalization of Bitcoin.
Firms like CryptoQuant and Glassnode see the increasing amount of stablecoins on exchanges as positive for the market.
The “Stablecoin Supply Ratio,” a metric used by these blockchain analytics firms to track how deposits of stablecoins on exchanges affect Bitcoin’s price, is printing a “strong buy” signal.
More than just stablecoins
Cash on the sidelines doesn’t only involve stablecoins. There’s actual cash in bank accounts sitting on the sidelines waiting to enter Bitcoin, Ethereum, and other cryptocurrencies.
Square made this much clear just on Thursday when it revealed that it had purchased $50 million worth of Bitcoin for its balance sheet with one percent of its available assets. Jack Dorsey, who heads the company, has long promoted Bitcoin, calling it the Internet’s best contender to become the native currency of the Internet.
Spencer Noon, head of DTC Capital, also indicated that there are institutional investors on the sidelines looking to deploy capital into Ethereum to gain tacit exposure to the decentralized finance space.
Bitcoin Market Data
At the time of press 4:36 pm UTC on Oct. 11, 2020, Bitcoin is ranked #1 by market cap and the price is up 0.73% over the past 24 hours. Bitcoin has a market capitalization of $211.42 billion with a 24-hour trading volume of $21.26 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 4:36 pm UTC on Oct. 11, 2020, the total crypto market is valued at at $358.49 billion with a 24-hour volume of $77.72 billion. Bitcoin dominance is currently at 58.45%. Learn more about the crypto market ›
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Tether
$1.00050
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
USD Coin
$0.99998
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Glassnode
Glassnode brings data intelligence to the blockchain and cryptocurrency space.
Jack Patrick Dorsey, born on November 19, 1976, is a testament to the American dream of innovation and entrepreneurship.