Cryptocurrency exchanges currently hold about 16% of aggregate market value of all stablecoins, with stablecoin market cap accounting to $63 billion while preparing this article, as per data provided by CoinGecko.com. The aggregate trading volume of entire chunk of stablecoins is assessed to be roughly $88 billion.
As per CryptoQuant data, net stablecoin holdings on cryptocurrency exchanges have been consistently recording all-time peak in 2021, jumping over 100% in last two months. Stablecoin inflows are usually seen as a near-term indicator of bullish rally for Bitcoin (BTC), indicating that sidelined capital is entering again into Bitcoin.
In addition to rising stablecoin accumulations, some other indicators such as CryptoQuant’s All Exchange Stablecoin Ratio could likely indicate another rally in cryptocurrency markets. Crypto Seer, a technical analyst, stated that the indicator has hit the lowest mark since November 2020.
He stated: “Each time this ratio has gone so low is marked by periods of significant strength for $BTC. The significant reduction in on exchange supply for BTC can be noticed here.”
The measure reflects Bitcoin holdings divided by the entire stablecoin reserves possessed by cryptocurrency exchange, indicating likely selling pressure. Notably, the recent landmark of stablecoin has come at a time when credit card behemoth Visa is trialing its foremost settlement mechanism in USD Coin on the Ethereum blockchain. After Tether, USD Coin is the second biggest stablecoin backed by the reserves of greenback.
All stablecoins holdings across all exchanges hit the all-time high, and now it's $10B.
Chart 👉 https://t.co/An5Ec2530d pic.twitter.com/custw1MM4I
— CryptoQuant.com (@cryptoquant_com) March 29, 2021
With respect to Visa’s initiatives related to USDC, Ki Young Ju, CEO of CryptoQuant, said “I smell crypto mass adoption here.” Ju stated that the surge in stablecoin holdings on cryptocurrency exchanges could be an outcome of further US investors venturing into the market.
“Stablecoin holdings across all exchanges could indicate potential buying power. Since last year, stablecoin market was mostly dominated by Tether, but now the market is evenly shared with other stablecoins like USDC, BUSD, HUSD, and etc. This stablecoin holdings surge came from the rise of USDC, which might indicate more US investors coming to this industry.”
The All Exchange Stablecoin Ratio has reached lows not seen since November. Each time this ratio has gone so low is marked by periods of significant strength for $BTC. The significant reduction in on exchange supply for BTC can be noticed here. @cryptoquant_com pic.twitter.com/THwkuCkavt
— Seer (@crypto_seer) March 28, 2021
As per CryptoQuant, USDC holdings on cryptocurrency exchanges have increased to more than $2.20 billion, while the market cap is about $11 billion.