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Bitcoin Boost Foreshadowed by Stablecoin Supply Ratios – BeInCrypto

According to data from the on-chain market analysis group Glassnode, the current Stablecoin Supply Ratio has reached an all-time low. Conversely, the USDT balances on exchanges are at an all-time high, which could create a perfect storm for a barrage of Bitcoin

Glassnode outlines the Stablecoin Supply Ratio (SSR) as a metric that defines a stablecoins’ supply ready to purchase Bitcoin, and thus drive the price of the major cryptocurrency up.

For example, if the Bitcoin market is seen as a ‘closed system’ with a fixed supply of stablecoins. When the price of Bitcoin is low and a stablecoin’s supply is able to buy a larger portion of the circulating Bitcoin supply, it has a high buying power.

The graph below from Glassnode not only shows the SSR at extremely low levels, but it also shows that there are huge amounts of stablecoins on exchanges, poised to be used for potential Bitcoin purchasing.

Stablecoins Gain a New Respect

Amid the ongoing COVID-19 induced market panic in traditional and cryptocurrency markets, there has been one entity that has fared well. Stablecoins have had their value justified, as their lack of volatility caused them to rise in prominence in the cryptocurrency markets.

Tether USDT Bitcoin

In fact, some stablecoin producers have even gone as far as to mint new coins at this time to add to the overall market cap of the crypto industry — a bit like the Federal Reserve’s recent money printing. Tether

Back to Bitcoin Before the Halving

Having suffered a dramatic drop in price, there would have likely been a mass evacuation out of volatile cryptocurrencies into more stable options, which in turn might have been the boost in demand that led to increased supply.

However, with the markets now calming down, and seemingly poised to grow once again, a perfect storm may be brewing for a rush back to Bitcoin from stablecoins.

Bitcoin’s mining reward halving may also be a factor to consider when noting the Stablecoin Supply Ratio in comparison with the all-time high of USDT on exchanges.

While the markets have been struck by this unprecedented collapse, there are still many who feel that the Bitcoin reward halving will lead to renewed positive price action for Bitcoin. In fact, some are denouncing the current economic stimulus policies and putting forward Bitcoin as a way to ‘opt-out.’

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Disclaimer. Read MoreRead Less

As a leading organization in blockchain and fintech news, BeInCrypto always makes every effort to adhere to a strict set of editorial policies and practice the highest level of journalistic standards. That being said, we always encourage and urge readers to conduct their own research in relation to any claims made in this article.
This article is intended as news or presented for informational purposes only. The topic of the article and information provided could potentially impact the value of a digital asset or cryptocurrency but is never intended to do so. Likewise, the content of the article and information provided within is not intended to, and does not, present sufficient information for the purposes of making a financial decision or investment. This article is explicitly not intended to be financial advice, is not financial advice, and should not be construed as financial advice. The content and information provided in this article were not prepared by a certified financial professional. All readers should always conduct their own due diligence with a certified financial professional before making any investment decisions.
The author of this article may, at the time of its writing, hold any amount of Bitcoin, cryptocurrency, other digital currency, or financial instruments — including but not limited to any that appear in the contents of this article.


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