A recent influx of stablecoins, particularly Tether (USDT), into centralized cryptocurrency exchanges (CEXs) is sparking optimism within the market.
According to a X post from Nov. 15 published by CryptoQuant, a substantial $3.2 billion worth of USDT has flowed into CEXs since the U.S. presidential election on Nov. 5, marking the highest net inflow since November 2021.
Market liquidity is improving as stablecoins like USDT grow and flow into exchanges.
Since the US Presidential election, $3.2B in USDT has entered exchanges—the highest net flow since Nov 2021.
This liquidity boost could signal higher crypto prices ahead. pic.twitter.com/iR2scHhTGI
— CryptoQuant.com (@cryptoquant_com) November 15, 2024
This surge in liquidity is seen as a positive indicator for the broader cryptocurrency market. Increased liquidity can lead to smoother trading, reduced price volatility, and potentially higher asset valuations. As more stablecoins enter exchanges, it becomes easier for traders to buy and sell cryptocurrencies, which could stimulate demand and drive prices upward.
Stablecoin Ecosystem Booming
Meanwhile, Artemis data suggests that the stablecoin ecosystem continues to thrive, with impressive growth in key metrics over the past 30 days.
As of Nov. 18, total transaction volume has surged to $2.4 trillion, a significant increase of over 55%. This surge is accompanied by a 46% increase in the number of transactions, reaching 610.4 million. The growth in stablecoin active addresses, up 14% to 26.7 million, suggests a broadening user base as well.
While the supply of stablecoins has also expanded by 7% to $174.4 billion, the rapid growth in transaction volume and active addresses indicates that the increased demand is the primary driver of the market’s expansion.
Ethereum remains the dominant chain in terms of stablecoin supply, holding over $90 billion in assets, according to Armetis data. It has seen a 12.5% increase in stablecoin supply over the past month, likely due to increased activity on the network. However, its growth in transfer volume was relatively modest at 1.6%.
Ethereum dominates stablecoin supply, holding over $90 billion in assets. Source: ArtemisStablecoins: A Bullish Signal for Crypto?
Earlier in October, Julio Moreno, Head of Research at CryptoQuant, also confirmed in his interview with The Block that the growth in the market capitalization of stablecoins in recent months could contribute to a new uptrend in Bitcoin (BTC) and other cryptocurrencies, as stablecoins provide liquidity to crypto markets.
In total, stablecoins now have a market capitalization of over $190.7 billion, surpassing the previous all-time high of $187 billion recorded in 2022. Almost all of the leading tokens like USDT or USD Coin (USDC) are pegged to the U.S. dollar, the world’s reserve currency.
Additionally, Moreno pointed out that the growing market capitalization of stablecoins is positively correlated with higher Bitcoin prices. In his post from Sept. 30 the analyst stated that the net inflow of stablecoins into CEXs can serve as an important indicator for predicting Bitcoin’s future price.
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