The total supply of stablecoins surged past $100 billion, this indicator stated Bitcoin price has enough bullets to go up
The total supply of dollar-pegged stablecoins has grown past the $100 billion marks. With such a large stablecoin ratio, the Ratio MACD indicator says Bitcoin price has enough bullets to go up.
The total supply of dollar-pegged stablecoins has surged past $100 billion, will Bitcoin price increase in the near term?
At the time of writing, the total stablecoin supply is $100.33 billion. Much of that growth has been driven by the two biggest stablecoins: Tether’s USDT and Center Corporation’s USD Coin (USDC).
Tether holds a 62% market share, while USDC holds 21%, although USDC’s market share has been growing at a faster rate in recent weeks. At the end of last year, USDC’s market share was less than 10%.
Most of the stablecoin growth has occurred in recent months as can be seen from the chart above. For example, at the beginning of this year, the total stablecoin supply was only around $30 billion.
The strong growth of stablecoins shows that crypto market participants are increasingly deploying funds, including in areas such as derivatives and decentralized finance (DeFi). Derivatives traders often use stablecoins as collateral, while DeFi users use stablecoins to trade and lend capital for profit.
Stablecoins allow crypto market participants to move faster between transactions without waiting as many days compared to fiat transfers. Also, not all crypto exchanges support on-slope fiat, leaving stablecoins and other cryptocurrencies as the only solution for crypto trading.
The growing use of stablecoins has attracted the attention of global regulators, including the United States, such as last December, members of the US Congress proposed the Dividend Act. Stablecoin tethering and Banking Licensing Enforcement (Stable). If the proposed legislation becomes law in its current form, it would require all stablecoin issuers to obtain a banking license. The proposal effectively states that stablecoins are a type of deposit under federal law.
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