Could Stablecoins Be Used to Predict the End of the Bear Market?
The movement of stablecoins on CEX often signals changes in market momentum, so could be used to predict when the bear market will end.
When stablecoins are sent to exchanges in large quantities, it is usually a signal that institutions are preparing to buy. However, this has not happened yet, as stablecoins such as USDC have been leaving exchanges as the bear market deepens.
The data suggests that traditional finance institutions are increasingly turning to USDC as a stablecoin of choice, and that the majority of the supply is held off exchanges. This is a positive development for the cryptocurrency industry, as it points to growing institutional interest and confidence in digital assets.
“The next Bitcoin parabolic bull run might begin when massive USDC flows into exchanges,” he noted.
The next #Bitcoin parabolic bull run might begin when massive $USDC flows into exchanges.
For now, 94% of the USDC supply is outside exchanges, some of which are owned by TradFis like BlackRock, Fidelity, Goldman Sachs, etc.
They’ll move when they get orders from their clients. pic.twitter.com/Bqenvgugw1
— Ki Young Ju (@ki_young_ju) October 7, 2022
Stablecoin Regulations: Why They're Important and What's Next
It's promising to see other crypto-native stablecoins flowing into exchanges, and the amount stored on them is a little higher. This could mean that more people are getting interested in using these types of currencies as a way to store value. Hopefully this trend continues, as it could help to bring more stability to the crypto world.
As the cryptocurrency industry continues to grow, we are seeing new innovations emerge that are changing the way we trade and use digital assets. One such innovation is the use of stablecoins, which are digital assets that are pegged to a stable currency like the US dollar. One of the leading stablecoins is Tether, which has around 25% of its total supply sitting on trading platforms like Binance. This is likely due to the yield opportunities that Binance offers for its native stablecoin, Binance USD.
If the regulatory pressure on cryptocurrencies in the United States continues to mount, stablecoins are likely to be one of the first areas to come under scrutiny. Treasury Secretary Janet Yellen has identified them as a top priority for any new legislation, and it is clear that policymakers are starting to take the issue seriously. While it remains to be seen what kind of framework will ultimately be agreed upon, it is clear that the days of unregulated crypto activity are coming to an end.
A regulated stablecoin market would be a green light for institutions that have been waiting on the sidelines so far. This could cause the inflow of stablecoins to exchanges that signals the next bull market.
It's looking like the crypto winter is going to continue into 2023 before any thaw starts to take place. That's because it's unlikely that any major regulations will be passed in the United States this year. So, for now, it looks like we'll have to continue to wait and see what the future holds for cryptocurrencies.
Supplies in Decline: New Report
The stablecoin market is currently booming, with a total market capitalization of $149.7 billion and daily trading volume of $40 billion. This represents around 15% of the entire cryptocurrency market, and shows that stablecoins are becoming an increasingly popular choice for investors and traders.
It is clear that Tether's USDT remains the market leader in terms of both circulation and market share. Circle's USDC is a close second, but it remains to be seen if it can overtake USDT in the near future.
Although both Tether and Circle have seen their supplies decline during the bear market, Tether's supply has begun to slowly increase again over the past few months, while Circle's continues to decline. This could indicate that Tether is regaining some of the market share it has lost to USDC since the market downturn began.
There is a lot of excitement in the crypto world right now around the possibility of a "stablecoin bull market." A stablecoin is a digital asset that is designed to have a stable value, making it ideal for use as a currency or store of value.