Amid a cryptocurrency market that has seen a continued bearish trend since the advent of crypto ETFs, a recent positive sign has brightened the landscape.
Stablecoin supply has reached a new yearly high, rising to an impressive $134.3 billion, marking a significant change of $4.17 billion in the last 30 day.
This inflow represents the largest net inflow since March 2022, according to data from Glassnode, a renowned analytics firm in the crypto space.
Crypto Banter, a popular YouTube channel, recently highlighted this development as a bullish sign in a post on their platform.
Information from Glassnode reveals that, at the time of disclosure, the total valuation of stablecoins reached $128 billion, but has since increased to more than $134.3 billion, according to real-time data from CoinMarketCap.
The highlight of Glassnode’s report is the increase in stablecoin supply, which comes after a significant $4.17 billion increase in net market position change over the past 30 days.
More than $4 billion has entered the cryptocurrency market in the last month through stablecoins
A tweet from Crypto Banter summarizes the expected impact of this increase in stablecoin supply:
“Increase in stablecoin supply = Increase in liquidity. Increase in liquidity = More flows into cryptocurrencies. More flows into cryptocurrencies = Our favorite alts rise.“
Stablecoin supply hits new ATH at $133.485B
🔴 Increase in stablecoin supply = Increase in Liquidity.
🔴 Increase in liquidity = More flows into crypto.
🔴 More… pic.twitter.com/WdxHM5rcSa
— Crypto Banter (@crypto_banter) January 22, 2024
Crypto Banter highlights that this increase in supply directly translates into a significant increase in liquidity, that is, more funds available to invest in volatile tokens.
This analysis suggests that the stage is being set for a bull market, attracting more participants and driving prices to new highs.
It is important to note that prior to this observed trend, net flows into stablecoins were negative, as reflected in the chart provided in the report.
Furthermore, the graph illustrates that the historical peak of stablecoin inflows coincided with the crypto market’s peak in 2021, also reflecting the bearish trend that followed.
This chain of events suggests that the momentum generated by the rise in stablecoins can have a positive effect on the crypto market in general and particularly on the altcoins preferred by investors.