The size of the stablecoin market has reduced by over $2.2 billion in the past 10 days. It shows the high probability of investors moving money out of crypto and into traditional safe-haven assets like gold and silver. On-chain data shows a clear fall in the combined market value of the top stablecoins.
Analytics firm Santiment has noted that this decrease has happened alongside falling Bitcoin prices and record highs in gold and silver. This pattern is suggestive of the possibility of investors choosing safety over risk during a period of uncertainty.
Normally, money leaving crypto assets such as Bitcoin tends to get parked in stablecoins while traders wait for better opportunities. However, this time the falling stablecoin supply points to funds exiting the crypto ecosystem altogether.
Santiment has warned that reduction in the liquidity in stablecoins may lower buying power in the market, especially for altcoins, which rely more on fresh capital. Bitcoin may remain relatively stronger, but even it faces limits without new inflows. According to Santiment, clearer recovery will likely begin only when stablecoin market caps start rising again.
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