Bitcoin
Bitcoin (BTC)
$69,537.00 4.43445
Bitcoin price
Ethereum
Ethereum (ETH)
$3,610.89 4.04118
Ethereum price
BNB
BNB (BNB)
$629.10 4.23888
BNB price
Solana
Solana (SOL)
$158.69 6.4801
Solana price
XRP
XRP (XRP)
$0.4964740 3.53408
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000230 5.23182
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000136 9.87177
Pepe price
Bonk
Bonk (BONK)
$0.0000305 11.7422
Bonk price
Bitcoin
Bitcoin (BTC)
$69,537.00 4.43445
Bitcoin price
Ethereum
Ethereum (ETH)
$3,610.89 4.04118
Ethereum price
BNB
BNB (BNB)
$629.10 4.23888
BNB price
Solana
Solana (SOL)
$158.69 6.4801
Solana price
XRP
XRP (XRP)
$0.4964740 3.53408
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000230 5.23182
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000136 9.87177
Pepe price
Bonk
Bonk (BONK)
$0.0000305 11.7422
Bonk price
Bitcoin
Bitcoin (BTC)
$69,537.00 4.43445
Bitcoin price
Ethereum
Ethereum (ETH)
$3,610.89 4.04118
Ethereum price
BNB
BNB (BNB)
$629.10 4.23888
BNB price
Solana
Solana (SOL)
$158.69 6.4801
Solana price
XRP
XRP (XRP)
$0.4964740 3.53408
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000230 5.23182
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000136 9.87177
Pepe price
Bonk
Bonk (BONK)
$0.0000305 11.7422
Bonk price
Bitcoin
Bitcoin (BTC)
$69,537.00 4.43445
Bitcoin price
Ethereum
Ethereum (ETH)
$3,610.89 4.04118
Ethereum price
BNB
BNB (BNB)
$629.10 4.23888
BNB price
Solana
Solana (SOL)
$158.69 6.4801
Solana price
XRP
XRP (XRP)
$0.4964740 3.53408
XRP price
Shiba Inu
Shiba Inu (SHIB)
$0.0000230 5.23182
Shiba Inu price
Pepe
Pepe (PEPE)
$0.0000136 9.87177
Pepe price
Bonk
Bonk (BONK)
$0.0000305 11.7422
Bonk price
SirWin
SirWin
SirWin

Stablecoin supply on cryptocurrency exchanges down 50% in 4 months

stablecoin-supply-on-cryptocurrency-exchanges-down-50-in-4-months
Edited by
Markets
Stablecoin supply on cryptocurrency exchanges down 50% in 4 months

Glassnode data on Mar. 26 shows that the stablecoin supply on exchanges has more than halved to less than $24b in four months.

Stablecoin supply on exchanges dropping

In November, stablecoin supply on exchanges stood at over $44b. Still, this figure, triggered by several fundamental factors, including regulatory actions, has been contracting over the months.

As of writing, only about $24b is held in various cryptocurrency exchanges. Some analysts believe that a big chunk might have been converted to other liquid crypto assets or currencies, including bitcoin (BTC) and ethereum (ETH), or solid cash like the USD.

Stablecoin supply on cryptocurrency exchanges down 50% in 4 months - 1
Stablecoin Balance on exchanges by Glassnode

In crypto, stablecoins track the value of other assets perceived to be stable. Stablecoins tracking fiat currencies like the USD are popular. 

The common ones include USDT, a token present in multiple blockchains like Tron and Ethereum, issued by Tether Holdings. It is pegged to the USD. Its issuers claim the token is sufficiently backed by cash and cash equivalents, including United States short-term securities like Treasuries. Other alternatives include USDC by Circle, BUSD by Paxos, and DAI, an algorithmic stablecoin by MakerDAO minted only on Ethereum. 

Historically, stablecoins have served as conduits, allowing users to channel funds from traditional finance to the cryptocurrency market. 

Since stablecoins are theoretically “stable” and divergent from crypto assets like bitcoin, which are volatile, tokens like DAI, USDT, and USDC can act as shields when crypto prices are under liquidation pressure.

Regulatory changes and stablecoins de-pegging

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

Last month, the New York Department of Financial Services (NYDFS) ordered Paxos, the issuer of BUSD, a stablecoin, to halt the minting of new tokens. It comes hours after the United States Securities and Exchange Commission (SEC) issued a Wells Notice to Paxos, claiming that BUSD was a security. This forced BUSD holders to convert to other stablecoins and assets, mostly USDT and USDC. 

Days later, the bank run at Silicon Valley Bank (SVB) impacted Circle, the issuer of USDC. Circle had $3.3b stuck in SVB. This triggered panic in the markets, forcing USDC to de-peg as users rushed to exit for USDT, which at that time was trading at a premium. The exit from USDC also impacted DAI, which de-pegged.

Analysts point out that the destabilization of stablecoins and increasing regulatory pressure may be why token holders could be exiting to currencies of legacy networks, including bitcoin. When writing on Mar. 26, bitcoin is trading at $27,831, up 15% in the last month.