Glassnode predicts BTC rally as stablecoin supply tags record highs

The circulating provide of the four-largest stablecoins has spiked to new all-time highs, suggesting consumers might quickly spark one other leg up for the Bitcoin and crypto markets.

The mixed capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI) has surged virtually 190% from $27 billion to virtually $78 billion for the reason that starting of this 12 months.

In its Could 3 Week on Chain report, on-chain analytics supplier, Glassnode, famous that Tether is firmly positioned because the secure token sector’s chief, representing two-thirds of the highest 4 stablecoins’ mixed capitalization. USDT’s whole minted provide hit an all-time excessive of $51.78 billion on the finish of final week after growing by $1.48 billion or 3% in simply seven days.

USDC provide has additionally elevated by roughly $1 billion over the previous week, with its capitalization at the moment sitting at $14.5 billion, in accordance with CoinGecko. It briefly tapped a peak of $15 billion on April 30.

BUSD’s circulating provide tagged a report of $7.8 billion on Could 3, whereas DAI’s provide is at an all-time excessive of $3.9 billion as of this writing.

With the surging provide, Glassnode highlights that Bitcoin’s Stablecoin Provide Ratio (SSR), which measures the Bitcoin provide divided by the stablecoin provide, is sitting at a year-to-date low of 13.4, and is approaching its all-time-low of 9.6.

The chart exhibits that SSR has been persistently low throughout 2020 and 2021 as stablecoin provides have largely grown in proportion to Bitcoin’s worth appreciation.

In accordance with Glassnode, a lowering SSR worth is a bullish sign that the worldwide stablecoin provide turning into bigger relative to the Bitcoin market cap:

“As the full provide of stablecoins enhance, it suggests an elevated ‘shopping for energy’ of crypto-native capital that may be shortly exchanged and traded into BTC and different crypto-assets.”

Aave’s liquidity mining incentives launched on April 27 would have additionally given a lift to stablecoin demand as the vast majority of the rewards have been focused in the direction of staking USDT, USDC, and DAI. DeFi traders have observed that Aave’s yield farming had a right away influence on stablecoin borrowing volumes which have over doubled since late April.