According to the newest on-chain information, liquidity within the cryptocurrency markets has reached an all-time excessive. Here’s the implication of the rising liquidity on the value of Bitcoin and its future trajectory.
Stablecoin Market Cap Hits New Highs — Impact On Bitcoin Price
In its newest report, CryptoQuant revealed that liquidity within the crypto market hit a document excessive in late September, sparking conversations concerning the Bitcoin bull market resuming. According to the on-chain analytics agency, crypto market liquidity is measured by stablecoin worth and market capitalization, which now stands at round $169 billion.
Data from CryptoQuant exhibits that the overall market capitalization of main US dollar-backed stablecoin has elevated considerably to this point in 2024, rising by 31% (equal to $40 billion) year-to-date. Most of the expansion, although, was triggered by the 2 largest stablecoins, Tether’s USDT and Circle’s USDC.
Source: CryptoQuant
Unsurprisingly, USDT and USDC proceed to dominate the stablecoin trade, with market shares of 71% and 21%, respectively. According to information from CryptoQuant, USDT’s market capitalization has grown by 30% in 2024 (about $28 billion) whereas USDC’s market cap is up by 44% (equal to $11 billion) year-to-date.
Another sturdy sign of rising market liquidity is the record-high stablecoin balances on centralized exchanges. Specifically, this development is pushed by USDT (ERC20 on the Ethereum), which has seen its balances on exchanges hit a document excessive of twenty-two.7 billion in October. This displays a 54% improve (about $8 billion) to this point in 2024.
Historically, growing balances of stablecoins on exchanges are positively related to greater crypto market costs, particularly the Bitcoin worth. This is as a result of the bigger shops of stablecoins can sign extra shopping for energy for traders, as they will shortly commerce stablecoins for different cryptocurrencies on exchanges (identified to supply these buying and selling companies).
Larger stablecoin balances on exchanges may sign the readiness of traders to accumulate crypto assets. Ultimately, this shopping for strain tends to push asset costs to the upside, particularly as traders usually buy anticipating upward worth motion.
With the rising liquidity out there, traders have been led to surprise concerning the Bitcoin bull run resuming quickly. It is price noting that the overall quantity of USDT (ERC20) on exchanges has risen by 146% from $9.2 billion to $22.7 billion since January 2023, when the present cycle formally began.
However, traders would possibly need to decrease expectations, contemplating that these USDT balances have elevated by 20% since August 2024 whereas Bitcoin’s worth has remained relatively quiet.
Bitcoin Price At A Glance
As of this writing, Bitcoin is valued at round $62,750, reflecting an virtually 3% improve previously day.
The worth of BTC on the every day timeframe | Source: BTCUSDT chart on TradingView
Featured picture from iStock, chart from TradingView
