It’s clear that the bull trend that transpired in the summer is over: Bitcoin, Ethereum, and other top coins have entered a strong consolidation pattern over recent weeks. BTC, for instance, has traded in a $1,000 range for the past six weeks.
But investors don’t think now is the time to relax: a fund manager in the space, Andrew Kang, noted that it is not wise to take time off now. Kang, the founder of Mechanism Capital, noted that there is “a lot of cash on the sidelines” with an “appetite for risk for both BTC and alts.”
That’s to say, there’s money waiting to enter the cryptocurrency markets should there be a proper catalyst, be that a positive fundamental development or price trends indicating further growth will be had.
Stablecoin supply surges, boosting Bitcoin & crypto prospects
The supply of U.S. stablecoins in circulation recently passed $20 billion despite this metric starting the year in the few billions.
This strong uptick in stablecoin demand shows at least two things:
- There is a demand for U.S. dollars to be deployed in the DeFi market.
- There is an underlying demand for cryptocurrencies.
Analysts are hopeful that the strong influx of stablecoins in circulation will increase the chances Bitcoin and other cryptocurrencies move higher. Historical analysis has found that the market capitalization of Tether’s USDT is somewhat correlated with the market capitalization of Bitcoin.
Firms like CryptoQuant and Glassnode see the increasing amount of stablecoins on exchanges as positive for the market.
The “Stablecoin Supply Ratio,” a metric used by these blockchain analytics firms to track how deposits of stablecoins on exchanges affect Bitcoin’s price, is printing a “strong buy” signal.
More than just stablecoins
Cash on the sidelines doesn’t only involve stablecoins. There’s actual cash in bank accounts sitting on the sidelines waiting to enter Bitcoin, Ethereum, and other cryptocurrencies.
Square made this much clear just on Thursday when it revealed that it had purchased $50 million worth of Bitcoin for its balance sheet with one percent of its available assets. Jack Dorsey, who heads the company, has long promoted Bitcoin, calling it the Internet’s best contender to become the native currency of the Internet.
Spencer Noon, head of DTC Capital, also indicated that there are institutional investors on the sidelines looking to deploy capital into Ethereum to gain tacit exposure to the decentralized finance space.
The post “Don’t vacation yet”: Stablecoin supply suggests Bitcoin and altcoins could rally further appeared first on CryptoSlate.
Source: “Don’t vacation yet”: Stablecoin supply suggests Bitcoin and altcoins could rally further