Stablecoins Boost Bitcoin’s Price with Increased Buying Power
Stablecoins are playing a significant role in influencing the price of Bitcoin. Data from Glassnode reveals that the stablecoin supply ratio (SSR) oscillator has decreased, indicating that stablecoins have more buying power to acquire Bitcoin. This shift in stablecoin supply trends correlates with Bitcoin’s recent surge to over $48,000.
Rise in Stablecoin Supply
The SSR oscillator has dropped from 4.13 in October to 0.74 as of January 22. This decline aligns with Bitcoin’s bullish trajectory, suggesting a direct connection between stablecoin supply and Bitcoin’s price performance. Notably, stablecoin supply has been increasing since Q4 of 2023.
Influx of Stablecoin Capital
Reports indicate that stablecoins have seen over $4 billion in inflows in the past month. Major stablecoins like Tether, USD Coin, Dai, and TrueUSD have experienced significant growth since October 2023. The aggregate market cap net position change metric shows positive values, indicating an increase in the total stablecoin supply.
Bitcoin’s Recovery Amid Stablecoin Influx
Despite recent price dips, Bitcoin has shown resilience and recovery thanks to the influx of stablecoin capital. While its daily trading volume has remained below $25 billion, Bitcoin has rebounded by almost 10% and is currently trading above $42,500.
Hot Take: Stablecoins Drive Bitcoin’s Bullish Run
The increased buying power of stablecoins has become a pivotal force behind Bitcoin’s recent price movements. With more stability and liquidity provided by these fiat-tied tokens, Bitcoin has shown its responsiveness to the shifting landscape in the stablecoin market. As stablecoin supply continues to grow, it will likely have a significant impact on Bitcoin’s future performance.
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