Stablecoin redistribution

Stablecoins are connected with market moves. Some having a stronger connection, some moving differently.

Additionally, the U.S. Treasury has sanctioned Tornado Cash mixer. Circle, the issuer of USD Coin, froze USDC connected with Tornado Cash. That stirred up some fears of stablecoin censorship in crypto community.

All together on the chart below, stablecoins marketcaps against market (BTC price).

The crypto market development through the lens of stablecoins:

The story it tells us is that:

  • First bottom, around May 11th, is the moment all stablecoin holders have shown a strong 'buy the bottom' behaviour, moving away from stables.
  • Second bottom, in June, is different, no confidence in buying the dip any more.
  • USDC marketcap began slowly bleeding weeks before latest Tornado Cash drama.
  • USDT has been hurt earlier and is still remains quite low.
  • DAI is active and moves along with the market.
  • BUSD is also active, showing strong 'buy the dip' activity

A bit more on DAI:

  • DAI marketcap seems to be the most sensitive to market moves, it likes to go along with market.
  • DAI marketcap move down could probably be a proxy of the 'market pain'. The stronger it drops, the stronger the pain.
  • Second bottom, in June, has shown a divergence between BTC price and DAI marketcap. Lower dip on a higher marketcap. It hasn't been like this before.

Overall, the stablecoin market is not doing dramatic moves. USDC probably flows into DAI. No strong accumulation, no dump. We keep watching.

Thanks for reading!

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