The circulating supply of the four major stablecoins has soared to a record high, indicating that buyers may soon push the Bitcoin and cryptocurrency markets to rise again.
The total market value of Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI) has soared by nearly 190% from 27 billion US dollars at the beginning of this year to 78 billion US dollars.
In the weekly report on the chain on May 3, on-chain analytics provider Glassnode pointed out that Tether is firmly in the leading position in the stablecoin field, with its market value accounting for two-thirds of the total market value of the four major stablecoins. USDT’s minting supply increased by 1.48 billion U.S. dollars (3%) in just seven days, reaching an all-time high of 51.78 billion U.S. dollars last weekend.
According to CoinGecko’s data, the supply of USDC has also increased by approximately US$1 billion in the past week, and its current market value is US$14.6 billion. On April 30, the market value of USDC briefly touched a peak of $15 billion.
On May 3, the circulating supply of BUSD reached a record 7.8 billion U.S. dollars, and as of this writing, the circulating supply of DAI reached a record 3.9 billion U.S. dollars.
With the surge in the supply of the four major stablecoins, Glassnode pointed out that the Bitcoin stablecoin supply ratio (SSR) is at a year-to-date low of 13.4 and is approaching its historical low of 9.6. SSR is a measure of the supply of Bitcoin divided by stablecoins. An indicator of supply.
Since the supply of stablecoins is directly proportional to the increase in the price of Bitcoin, SSR has been at a low level during 2020 and 2021.
Glassnode said that the decline in SSR value is a bullish sign, indicating that the global supply of stablecoins has become larger relative to the market value of Bitcoin:
“As the total supply of stablecoins increases, this indicates that the’purchasing power’ of encrypted native capital has increased. These capitals can be quickly traded and can be traded into Bitcoin and other encrypted assets.
Aave’s liquidity mining incentive plan launched on April 27 will also boost demand for stablecoins, because most of the rewards are for pledges of USDT, USDC and DAI. DeFi investors have observed that Aave’s liquidity mining has a direct impact on the amount of stablecoin borrowing. Since the end of April, the borrowing volume of stablecoins has more than doubled.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.