Bitcoin Soars to New Heights as Stablecoin Inflows Signal Anticipated Market Upswing
Summary:
On March 8, Bitcoin's price reached a new high of $70,083, reflecting an uptick in stablecoin inflows driven by spot Bitcoin exchange-traded funds in the US. Data shows a 6.5% increase in Tether and USD Coin balances on crypto exchanges in March, a sign that traders are preparing for more crypto purchases. At the same time, the total stablecoin market cap increased by 1.2% to stand at $145.2 billion. This surge in stablecoin inflows and growth in the market cap suggests market participants are preparing for positive crypto market results. Bitcoin's current trade price stands at $67,863.
Bitcoin (BTC) saw its value soar to a phenomenal new high of $70,083 on March 8. Despite a considerable decline in price shortly afterwards, data from stablecoin transactions shows that market players are expecting a further increase. This is due to a recent surge in stablecoin inflows, mainly propelled by spot Bitcoin exchange-traded funds in the US. Tether (USDT) and USD Coin (USDC) balances on crypto exchanges have risen by 6.5% since the start of March, indicative of traders setting up for increased crypto purchases with Bitcoin's anticipated return to its positive trajectory. Crypto exchange wallet balances have also experienced an increase, growing from $18.43 billion at the beginning of March to $19.63 billion by March 8, according to data from market intelligence company Glassnode.
Additional statistics from CryptoQuant, a market data provider, show that the rise in stablecoin balances on exchanges during early March corresponded with an increase in stablecoin deposit transactions, as crypto prices also increased. Meanwhile, stablecoin market capitalisation also experienced a 1.2% increase in March, standing at $145.2 billion as of the time this was reported. Among this, Tether's USDT contributes over 70%, amounting to $101.2 billion.
The total trading volume for all stablecoins is currently around $112.7 billion, with USDT alone accounting for $86.65 billion of the total. As market participants position themselves, impressive inflows of stablecoins to exchanges and ongoing market cap increases are widely accepted indicators of performance. This is further boosted by the strong results of the spot BTC ETFs and the anticipated reduction in Bitcoin supply – an event due to take place in around 41 days. Analysts have previously connected an increase in stablecoin inflows to exchanges with a Bitcoin rally that took place in October 2020.
As more capital becomes available to move back into digital assets, increased stablecoin inflows to exchanges are seen as a potential driver for more positive crypto market results. One user of the X social network, Bitcoin Munger, has noted that growth in the stablecoin market cap has corresponded with the price increase of BTC. Additionally, Santiment, a market data tracking company, has observed that middle and large-scale investors are standing their ground, undeterred by Bitcoin's steep decline after momentarily peaking at $69,324 on March 5.
The current trade price of Bitcoin is $67,863, reflecting a 0.73% increase over the past 24 hours, as per CoinMarketCap data.
This report does not offer any investment advice or suggestions. All investments and trading maneuvers come with risk, and readers should conduct their own investigations before making any financial decisions.
Published At
3/8/2024 8:50:03 PM
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