Stablecoins on the Rise
The circulating supply of the four largest stablecoins has reached unprecedented heights, which might just be the spark that ignites another upward trend in the Bitcoin and crypto markets. Since the dawn of 2023, the collective capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI) has erupted astonishingly by nearly 190%, skyrocketing from $27 billion to an impressive $78 billion!
Tether Takes the Lead
In a recent report by on-chain analytics provider, Glassnode, it’s revealed that Tether continues to reign supreme in the stable token realm, accounting for roughly two-thirds of the amalgamated capitalization of the top four stablecoins. By the end of last week, USDT’s minted supply soared to an all-time high of $51.78 billion—an increment of $1.48 billion, or about 3%, in just one week. That’s a strong flex, Tether!
USDC, BUSD, and DAI Join the Party
But Tether isn’t the only one celebrating. The supply of USDC has similarly surged, adding approximately $1 billion over the past week, currently resting at around $14.5 billion. It even flirted with the $15 billion mark on April 30!
Moreover, BUSD saw its circulating supply hit a record of $7.8 billion on May 3, while DAI is enjoying its own milestone with a supply now reaching $3.9 billion. It’s party time in stablecoin land, folks!
The Crypto Market Connection
With this increasing supply of stablecoins, Glassnode highlights an intriguing metric: Bitcoin’s Stablecoin Supply Ratio (SSR). This calculates the Bitcoin supply in relation to stablecoin supply, and it’s currently at a year-to-date low of 13.4, inching closer to its all-time low of 9.6.
A lower SSR value is typically viewed as a bullish sign—indicating that the global stablecoin supply is outgrowing Bitcoin’s market capitalization. As the total of stablecoins rises, it translates to an increased ‘buying power’ for crypto enthusiasts ready to pounce on Bitcoin and other crypto assets. It’s like having a full wallet at a candy store!
Aave’s Influence on Stablecoin Demand
Additionally, Aave’s liquidity mining incentives, launched on April 27, may have further fueled the demand for stablecoins. A majority of the rewards available are directed toward staking USDT, USDC, and DAI—resulting in an immediate and noticeable uptick in stablecoin borrowing volumes that have more than doubled since late April. Talk about a double whammy for stablecoins!
+ There are no comments
Add yours