Bitcoin Grows as Stablecoin Supply Jumps
31 Jan, 2024 ● Vijesti o kovanicama
Bitcoin is experiencing an upswing, partly due to an increase in the purchasing power of stablecoins, as their supply grows.
Glassnode, an on-chain analytics company, observed a continuous decrease in the stablecoin supply ratio (SSR) oscillator.
This month, Bitcoin approached two-year highs, a trend that began in October 2023. According to data, the rise in Bitcoin's value is linked to stablecoin market activity.
The SSR oscillator measures the relationship between the market cap of Bitcoin and the total value of all stablecoins.
Glassnode describes this metric as a reflection of the supply and demand dynamics between BTC and USD.
Lower SSR values indicate that stablecoins can buy more BTC.
Following record highs in October, the SSR oscillator has significantly dropped, from 4.13 on October 25 to just 0.74 on January 22.
James Van Straten from CryptoSlate, a crypto research firm, noted a rise in stablecoin supply starting in the last quarter of 2023, a trend that is persisting into the current year.
“Stablecoin supply is now 10B higher from the low, and 3.5% higher in the past 30 days,” Van Straten mentioned in his update to X subscribers on January 31.
Contrastingly, from May 2022 to October 2023, the supply of stablecoins was on a downward trajectory.
In its recent “The Week On-Chain” newsletter, Glassnode pointed out that on-chain flows remain volatile three weeks after the ETF debuts.
“Conversion to a spot ETF has triggered significant a re-balancing event,” the Glassnode researchers noted, referring to the GBTC ETF.
They highlighted that approximately 115.6k BTC have been redeemed from the GBTC ETF since its conversion, impacting the market.
These redemptions are expected to slow down shortly, likely easing selling pressure.
Glassnode also mentioned that institutional activities are contributing to the increase in on-chain transaction volumes.
Sources:
https://cointelegraph.com/news/bitcoin-price-stablecoin-boost-supply-jumps-3-5-in-one-month
https://insights.glassnode.com/the-week-onchain-week-05-2024/
