Ki Young Ju (Ki Young Ju), CEO of the analytical platform CryptoQuant, says that the beginning of the next upward phase of Bitcoin can be accompanied by a sign; A sign related to the re-welcome of digital currencies by institutional investors.
To Report Cryptopotato, when stablecoins are being deposited into exchanges in large amounts, it is usually assumed that large investors are preparing to buy new units and enter the market. This has not happened in the market for a long time, and on the contrary, as the downtrend deepened, a significant amount of stablecoins left the exchanges.
Yesterday, Yang Ju pointed out on his Twitter that currently 95% of the circulating supply of USDC, the second stablecoin in the digital currency market, is held outside of exchanges, with a large portion held by traditional financial institutions. The big ones are Fidelity, Goldman Sachs and BlackRock.
Yang Ju said about this:
Bitcoin’s next bullish phase will likely begin when a large amount of USD coins are released to exchanges.
As for other stable coins in the market, the stock of exchanges is a little more than USD coin. For example, 25% of Tether’s circulating supply is currently held on exchanges, and for Binance USD (BUSD), this rate reaches more than 70%. Of course, the reason for the high share of exchanges from the supply of Binance USD is probably the opportunities to earn profits and invest with this stable coin that is offered on the Binance exchange.
Regulatory pressure on the digital currency industry is mounting in the US, with President Joe Biden pressuring Congress and other active US policymakers to avoid delaying digital asset legislation. One of the first sectors that will be under the microscope with the finalization of a legal framework and the agreement of the regulatory bodies of this country are stable coins. Janet Yellen, the US Treasury Secretary, has also introduced stablecoins as the main priority in applying the new rules.
Legislation of the stablecoin market and the continued operation of these assets in an environment where companies issuing stable digital currencies are required to regularly audit the financial support of their tokens will be a green light for those institutions that have so far refused to enter this market due to legal risks. . This flow can cause a significant amount of stablecoins to enter the exchanges; An event that will be a bullish sign for Bitcoin and other digital currencies.
However, since US regulations in this area are unlikely to be finalized before the end of this year, the current bear market is likely to continue until 2023.
The declining value of the stablecoin market
The total market value of stablecoins is currently 149.7 billion dollars, which means that these assets account for 15% of the total value of the digital currency market. The volume of daily transactions of stable digital currencies is also estimated at 40 billion dollars. Tether is still the leader of stablecoins with 63.3 billion tokens and has a 45.6% share of this market. USD Coin also ranks second after Tether with 46 billion tokens in circulation and has 31% of the stable digital currency market.
The supply of both of these stablecoins has decreased during the current bear market, with Tether and USDCoin each experiencing an 18% drop from their peak supply. While Tether has recovered some of its previous supply declines over the past few months, USDCoin’s supply decline continues.