2nd -largest stablecoin inflows ever hit exchanges: Fuel for Bitcoin?
On-chain data suggests huge stablecoin inflows to exchanges, which might boost Bitcoin.
Stablecoin Exchange Inflows Rise
In a CryptoQuant Quicktake report, an analyst saw a dramatic increase in stablecoin exchange inflow. “Exchange Inflow” is an on-chain measure that tracks the total quantity of an asset or group of assets moved to exchange-connected wallets.
Investors are depositing a lot of asset tokens to these controlled systems when this indication is high. A pattern like this suggests substantial coin trading demand.
This trend's impact on the industry depends on the coin or set of cryptocurrencies. For volatile currencies like Bitcoin, exchange inflows indicate investors want to sell.
Exchange inflows indicate traders desire to sell stablecoins like Tether's USDT, but pricing doesn't fluctuate since they're stable around $1. Not that stablecoin exchange inflows are irrelevant.
Investors deposit their wealth in fiat-tied tokens to prevent Bitcoin and other asset volatility. Since they would have chosen fiat to quit the sector, these holders usually buy back into the volatile side.
Stablecoin investors shift to exchanges when they decide to acquire Bitcoin and others. This may boost the prices of the currencies they switch to.
The following graph shows a $9.3 billion rise in Exchange Inflow for all ERC-20 stablecoins. The indication is second-largest ever.
The quant said Binance and Coinbase received most of these inflows. The former had $4.3 billion inflows, while the latter had $3.4 billion.
After the US presidential elections, the cryptocurrency market has been optimistic, therefore these inflows may have been used to buy Bitcoin and other assets.
The researcher saw big stablecoin Exchange Inflow surges before the 2021 bull run on the chart. It is unclear whether the recent increase will start a similar cycle of events.
