Stablecoin Outflows Peak at -$8.6B in Wake of LUNA Collapse: Glassnode
The stability and reliability of stablecoins have always been a significant draw for investors. They are pegged to a stable asset, usually a fiat currency, which gives them the stability that other cryptocurrencies lack. However, the recent LUNA collapse has shaken investor confidence in stablecoins, leading to significant outflows.
According to Glassnode, a leading provider of on-chain market intelligence, the aggregate stablecoin supply has been experiencing severe outflows in the wake of the LUNA collapse. Market participants have been redeeming their tokens at a rapid rate, resulting in a peak monthly outflow of -$8.6B.
The LUNA collapse was a massive shock to the cryptocurrency market. LUNA, the native token of the Terra platform, experienced a significant price drop, resulting in a domino effect on other digital assets. The sudden decline in LUNA’s value caused a panic among investors, leading to a mass exodus of stablecoins.
The outflows from stablecoins were particularly worrisome for investors who had hoped that stablecoins would be a safe haven in times of market volatility. The massive outflows indicated that even the most stable of digital assets were not immune to market fluctuations.
However, there is some good news amidst the gloom. When assessing the monthly supply change from a high timeframe perspective, stablecoin outflows have been diminishing. This trend suggests initial glimmers of returning demand and capital inflows into the digital asset space.
While the outflows may have been alarming, the fact that they are slowing down is a positive sign. It indicates that investors are slowly regaining confidence in the market and that stablecoins may once again become a popular choice for investment. It remains to be seen whether this trend will continue, but for now, the cryptocurrency market seems to be slowly recovering from the shock of the LUNA collapse.
- Tether Reports All-Time High Net Profit Of $1.48 Billion In Q1 2023
- April Sees $1.5 Billion Worth Of Stablecoins Leave Exchanges As Traders Seek Market Stability