Glassnode Predicts BTC Growth Amid Record Growth in Supply of Stablecoins

The turnover supply of the four largest stablecoins surged to new all-time highs, suggesting that buyers may soon give new impetus to the bitcoin and cryptocurrency markets.

The combined capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) has grown by almost 190% since the beginning of this year, from $ 27 billion to nearly $ 78 billion.

On May 3 Week online In a report by on-chain analyst provider Glassnode, Tether is firmly positioned as the leader in the stable token sector, representing two-thirds of the combined market cap of the four largest stablecoins. The total number of USDT minted reached a record $ 51.78 billion late last week, following an increase of $ 1.48 billion, or 3%, in just seven days.

According to CoinGecko, USDC supply has also increased by about $ 1 billion in the last week, and its market cap is currently $ 14.5 billion. On April 30, it briefly peaked at $ 15 billion.

BUSD’s turnaround supply hit a record $ 7.8 billion on May 3, while DAI’s supply is at an all-time high of $ 3.9 billion at the time of this writing.

In response to the growing supply, Glassnode emphasizes that the Bitcoin stablecoin supply ratio (SSR), which measures Bitcoin supply divided by the stablecoin supply, is at its lowest year-to-date at 13.4 and is approaching its all-time low of 9.6.

Bitcoin to stablecoin supply ratio: Glassnode

The graph shows that SSR remained consistently low throughout 2020 and 2021, as supply of stablecoins rose significantly in proportion to the appreciation of bitcoin.

According to Glassnode, the decrease in the SSR value is an optimistic signal that the global supply of stablecoins is growing in relation to the market cap of bitcoins:

“As the total supply of stablecoins increases, this indicates an increase in the ‘purchasing power’ of own crypto-capital, which can be quickly exchanged and exchanged for BTC and other cryptoassets.”

Aave’s liquidity mining incentives, launched on April 27, would also spur demand for stablecoins, as most of the rewards went towards USDT, USDC and DAI placement. DeFi Investors Have observable that Aave’s yield had an immediate impact on stablecoin borrowing, which has more than doubled since late April.