"Stablecoins ban" - does anyone really care?

  • Summary: Reevaluating market confidence using stablecoins holders behaviour and onchain data. Has the latest news had any effect?
  • Assets covered: USDT, USDC, HUSD, TUSD, GUSD, BUSD, PAX
  • Metrics used: Social Volume, Social Dominance, Amount in non-exchange top holders, Marketcap, Supply on exchanges, Holders balance

"Central Banks Recommended to Ban Stablecoins" - these were the titles of yesterday's news, making some frightening calls:

Given the market’s heavy reliance on stablecoin, a ban could mean disaster for Bitcoin and the broader cryptocurrency market

News makers doing their job well.

All this buzz is based on following "consultative document" - https://www.fsb.org/wp-content/uploads/P150420.pdf

Key points:

  • Stablecoins may have the potential to pose systemic risks to the financial system and significant risks to the real economy, including through the substitution of domestic currencies
  • Stablecoins should face the same rules as other businesses that present the same risks
  • There should even be cross-border cooperation to ensure stablecoins do not work in the favor of certain countries

We wanted to see how did the cryptoverse respond.

Cause social volume chart shows quite a solid interest to this topic on Tuesday and Wednesday:

Here's some reactions in chats and social channels:

  • Stablecoins banning - is it legit and real?
  • Lol goodluck beeing in stablecoins
  • Central Banks recommended to ban Stablecoins (nice interpretation!)
  • How is possible to shutdown decentralized stablecoins, only if shutdown Ethereum
  • But, wait, it’s only about stablecoins, not crypto or Bitcoin
  • Stablecoins are printing almost as fast as the fed
  • since stablecoins will be banned soon, bitcoin will dump
  • a possible scenario is people go from stablecoins to BTC and ETH and hedge it on futures
  • stablecoins were simply used to avoid paying taxes for cashing out
  • I think people want to get out of stablecoins

@sanfam noticed an influx of stablecoins, reading alerts in Santiment Discord:

One of alerts

Previously @Ibis shared a detailed research on stablecoins - https://insights.santiment.net/read/is-everyone-fuding-into-stablecoins%253F-5677

With key takeaways focused like this:

Did anything change these days? After the "ban of stablecoins".

We'll take a look at onchain data.

Is the first point still valid?

Yes. Whales (non exchange top holders) keep increasing positions in USDT and USDC.

"The ongoing accumulation among Tether whales supports the widely-held belief that big players are retreating into stablecoins for the time being. Should we see this trend continue in days to come, it could prove a worrying sign for Bitcoin’s short-term recovery." - said Dino a few weeks ago. Here we go, a worrying sign for Bitcoin’s short-term recovery is in place.

What about stablecoins marketcap?

It keeps increasing for many. Biggest increase for USDT, almost stable - TUSD.

Supply on exchanges?

Same patterns. No "ban" can stop it. Tons of stablecoins keep entering exchanges.

May possibly be read like a pre-buy positioning before bounce back.

Token circulation?

Same again.

Finally we wanted to check what is retail doing with stablecoins.

For example owners of 1,000 - 10,000 USDT:

They expressed a short wave of confidence decreasing exposure to USDT.
But then reverted back to uncertainty and started piling up stablecoin again.

Finally, the last words of our previous stablecoin research stated:

" If we see whales and/or retail owners start offloading their stablecoin bags - and especially if there’s a corresponding spike in the inflow of stablecoins to exchanges - it might suggest a paradigm shift and a growing confidence among investors in a market-wide recovery."

I fact we still do not see whales offloading stablecoin as well as retail.

Means no paradigm shift, no confidence in recovery yet.

Take care.

P.S. Have you tried out this great feature of comparing all kinds of assets and metrics on one single chart?

Does it help in your researches?

Thanks for reading!

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