Amid renewed bullish action in the cryptocurrency markets, stablecoins like Tether (USDT) are flooding the exchanges and hitting a new all-time high in terms of allocation.
According to market data provider CryptoQuant, stable coin holdings on global crypto exchanges hit a new all-time high on Jan. 28, exceeding $ 4.7 billion.
That amount makes up a significant chunk of the total stable coin market cap, which is valued at around $ 35.2 billion at the time of writing, according to CoinGecko. The total trading volume of all stablecoins is now estimated at around $ 111 billion, with Tether (USDT) alone accounting for $ 103 billion.
Source: CryptoQuant
In addition to stablecoin holdings on crypto exchanges hitting a new all-time high, the number of inflowing stablecoin transactions also appears to be increasing at the time of writing. On January 28, the number of stable inflow coin transactions was nearly 33,000 transactions, up from 30,000 transactions on January 27.
Massive inflows of stable coins are often viewed as a short-term catalyst for Bitcoin, suggesting that the defaulting capital is moving back into BTC. In particular, fiat pegged stablecoins such as USDT are becoming an increasingly useful tool for traders to make deposits on crypto exchanges and buy and sell multi-million dollar bitcoin. Hence, increasing allocations of stable coins to crypto exchanges may be associated with increasing purchasing power.
As previously reported by Cointelegraph, the start of the Bitcoin rally in October 2020 was due to an increase in the flow of stablecoins to the exchanges.
At the time of writing, the crypto markets are on a remarkable uptrend, with the majority of the top 10 coins by market cap growing significantly and Bitcoin returning above $ 32,000.
