Glassnode predicts a BTC rally as the stablecoin supply tags hit record highs
Circulating supply of the four largest stablecoins has hit new all-time highs, suggesting buyers could soon take another step for the bitcoin and crypto market.
The combined capitalization of Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI) has increased nearly 190% from $ 27 billion to nearly $ 78 billion since the beginning of this year.
In its report on the chain the week of May 3, Glassnode, a provider of on-chain analytics, found that Tether is a firm leader in the stable token sectors, accounting for two-thirds of the combined capitalization of the four largest stablecoins . Total minted supply from USDT hit an all-time high of $ 51.78 billion late last week, after rising $ 1.48 billion, or 3%, in just seven days.
USDC supply has also increased by around $ 1 billion in the past week. According to CoinGecko, its capitalization is currently $ 14.5 billion. On April 30, it briefly peaked at $ 15 billion.
BUSD’s circulating offering hit a record $ 7.8 billion on May 3, while DAI’s offering is currently at an all-time high of $ 3.9 billion.
With the supply increasing, Glassnode highlights that Bitcoin’s Stablecoin Supply Ratio (SSR), which measures Bitcoin supply divided by Stablecoin supply, is at an annual low of 13.4 and approaching its all-time low of 9.6.
Bitcoin-stablecoin delivery ratio: glass knot
The graph shows that the SSR was persistently low in 2020 and 2021 as the supply of stable coins has largely increased in relation to the increase in the price of Bitcoin.
According to Glassnode, a falling SSR is a bullish signal that the global supply of stable coins is growing relative to Bitcoin market capitalization:
“As the overall supply of stable coins increases, this indicates increased purchasing power of crypto-native capital that can be quickly exchanged and traded for BTC and other crypto assets.”
Aave’s liquidity depletion incentives launched on April 27 would have also boosted stable coin demand, as the bulk of the rewards were aimed at the use of USDT, USDC and DAI. DeFi investors have observed that Aave’s profitable agriculture had an immediate impact on coin stable credit, which has more than doubled since late April.