Record-breaking stablecoin liquidity soars to an astounding $220 billion, as per the latest report.
Crypto Quant Weekly Report Highlights Record-Breaking Stablecoin Liquidity and its Bullish Impact on Bitcoin
The latest CryptoQuant Weekly Report sheds light on a new milestone for stablecoin liquidity, topping out at a staggering $220 billion. This surge can be mainly attributed to the burgeoning market caps of Tether (USDT) and USD Coin (USDC), fueling a massive influx of capital into the broader crypto landscape.
A Bullish Signal for Bitcoin
According to the April 30 report, USDT's market cap saw a hefty $2.5 billion increase last week, while USDC's climbed by $1.2 billion. Combined, these two giants had a colossal $3.7 billion growth in market cap, leading to the strongest weekly expansion in stablecoin supply since February 9.
Over the past month, these statistics have risen even higher. USDT has added $5.3 billion to its market cap, and USDC surged by a whopping $6 billion in the same span. Both stablecoins have breached their 30-day moving averages—a pattern historically associated with increased liquidity and a stronger performance across the crypto market, and more specifically, Bitcoin (BTC).
The Bitcoin Bull Score Index, which gauges investor sentiment and market strength, surged from a lowly 20 to a more positive 50 this week. This upward trend can be partly credited to the impact of accumulating stablecoin liquidity. Despite this progress, the index remains below 60, suggesting that more sustained price rallies might be on the horizon.
Bullish momentum has propelled Bitcoin to a more impressive performance over the past three weeks. It has soared by over 25%, rebounding from an April 9 low of approximately $74,000 to over $96,500 in early May.
Robert Breedlove, a well-known Bitcoin evangelist, recently pointed out that the average miner cost of production could signal the commencement of a new bull run. He underscored that this vital metric, often seen as the market's break-even point, typically signals cycle bottoms and could indicate a potential price floor.
A Mixed Picture for Stablecoins
The exceptional growth notwithstanding, USDT's liquidity reserves on crypto exchanges have yet to fully recover from their February 21 high of $43 billion. Currently, the total USDT held on exchanges stands at $38 billion, recording a 12% dip from its peak level.
On the flip side, USDC balances on exchanges have attained a record high of $6.5 billion, marking the highest level since March 2023. Exchange-based stablecoin reserves assume significance due to their quick availability for trading and investment, which in turn can support digital asset price activity.
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Sources:
- Crypto Quant Weekly Report
- Market Cap data for Tether (USDT) and USD Coin (USDC)
- Bitcoin Bull Score Index data
- Crypto market performance data for Bitcoin (BTC)
- Stablecoin liquidity and exchange balance data for USDT and USDC
- The latest Crypto Quant Weekly Report suggests that the rise in stablecoin liquidity, particularly Tether (USDT) and USD Coin (USDC), is fueling substantial crypto exchange trading activity.
- The unprecedented growth in stablecoin market caps, as indicated by the Crypto Quant Weekly Report, has had a bullish impact on Bitcoin (BTC), contributing to its 25% surge over the past three weeks.
- Despite the significant growth in market caps and the potential for increased liquidity, USDT's liquidity reserves on crypto exchanges have dropped from their February high, while USDC balances have reached a record high.
- The bullish momentum in the crypto industry, driven by stablecoins and Bitcoin's performance, has led to an increased investor sentiment, as signified by the Bitcoin Bull Score Index, which has risen from 20 to 50 this week.
