Aggregate Stablecoin Market Cap Change Has Returned To Equilibrium
According to data from Glassnode, the aggregate stablecoin market cap had been declining for 14 months but has now returned to equilibrium. This refers to the total valuation in USD of the top five stablecoins: Tether, USD Coin, Binance USD, Dai, and TrueUSD. Historically, the market cap of these assets has provided insights into capital flows in the market. When the 30-day percentage change is positive, it indicates net inflows, while negative values imply outflows. During the 2021 bull run, the market cap saw consistent growth as investors used stablecoins to escape volatility. However, as the bear market began in 2022, the outflows started to equal the inflows, resulting in net redemptions for 14 months. Recently, the metric has neared equilibrium, suggesting a potential for breaking into the inflows regime.
- The aggregate stablecoin market cap had been declining for 14 months but has now returned to equilibrium.
- This refers to the total valuation in USD of the top five stablecoins: Tether, USD Coin, Binance USD, Dai, and TrueUSD.
- Positive 30-day percentage change indicates net inflows, while negative values imply outflows.
- During the 2021 bull run, the market cap consistently grew as investors used stablecoins to escape volatility.
- Since the bear market began in 2022, there have been net redemptions for 14 months.
- Recently, the metric has neared equilibrium, suggesting a potential for breaking into the inflows regime.
How Bitcoin Could Benefit from the Stablecoin Market Cap Reversal
If the stablecoin market cap starts to expand, it would be a bullish sign for Bitcoin. This would indicate the presence of more capital in the market in the form of stablecoins, which could be used to purchase Bitcoin. Currently, Bitcoin is trading around $30,400, showing a 1% increase in the last week.
Hot Take: The return of the stablecoin market cap to equilibrium and the potential for expansion could provide a boost to Bitcoin. With more capital available through stablecoins, there may be increased demand for Bitcoin, leading to a potential price increase.
