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Dramatic Decrease in Supply of Stablecoins on Cryptocurrency Exchanges in 4 Months

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Gherardo Fiorenzo
Gherardo Fiorenzo is an Italian author with a unique perspective shaped by his experiences in Italy and the US. His thought-provoking articles, short stories, and reviews explore the intersections of language, identity, and culture.

Glassnode data on March 26th shows that stablecoin supply on exchanges have more From half to less than $24 billion in four months.

Supply of stablecoins on Exchanges are going down

In November, stablecoin supply on Exchanges stood in over $44 billion. still this number, triggered By several underlying factors, including regulatory procedures, contracted over Months.

like of writingOnly about $24 billion is kept in various Cryptocurrency exchange. Some analysts believe that A big chunk It may have been converted to another liquid cryptocurrency assets or currencies, incl bitcoin (BTC) and Ethereum (ETH), or hard cash like dollar.

In cryptocurrencies, stablecoins track value of last assets It is seen as stable. Stablecoins follow fiat currencies like The dollar is common.

the common of which USDT and a token Present in multiple strings like Tron and Ethereum, issued by Tether Holdings. It is pegged to the US dollar. Its exporters claim to own token enough before cash And cash equations, including US short-term Guarantees like Treasury bonds. Other alternatives include USDC by Circle, BUSD by Paxos, and DAI, which is an algorithm stablecoin By MakerDAO just kept silent on Ethereum.

Historically, stablecoins have acted as channels that allow users to channel funds from traditional Cryptocurrency financing market.

Since in theory stablecoins are “stable” and far from cryptocurrencies assets like bitcoinwhich are volatile, tokens like DAI, USDT, and USDC can act as such shields When cryptocurrency prices are under liquidation pressure.

organizational changes and the process of unpegging stablecoins

There could be several explanations behind sharp contraction of stablecoin supply on exchanges.

Last month, the New York section of Paxos Financial Services (NYDFS) ordered, the issuer of BUSD, a stablecoin to stop the coinage of new symbols. Come hours After the US Securities and Exchange Commission (SEC) issued a notice from Wells to Paxos, claiming that BUSD was a security. This forced BUSD holders to convert to other stablecoins and assetsmostly USDT and USDC.

(embed) https://www.youtubecom/watch? v = 9EE4to6cw6c (/embed)

Days later, it was bank run At Silicon Valley Bank (SVB), Circle influenced its issuance of USDC. Circle was stuck with $3.3 billion in SVB. this triggered panic in markets, forcing USDC to decouple as users rush to exit for USDT, which was at that time trading at a premium. Exit USDC also DAI affected, which disengaged.

Analysts point out out that destabilize of Stable and growing currencies regulatory Stress may be the cause token Coin holders can exit of Legacy networks, incl bitcoin. when writing on March 26th bitcoin He is trading At $27,831, up 15% in the last Month.

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