Stablecoins behavior so far

Assets covered: USDT, BUSD, USDC

Metrics used: Marketcap, Supply outside of Exchanges

Stablecoins and the Cryptomarket

Major stables combined marketcap - Sanbase

The start of the year was rather positive as we saw constant inflow of major stables (USDC, BUSD, USDT) into the cryptomarket, suggesting that new money is coming to perhaps buy the dip (as prices were falling).

Major stables' marketcap eventually peaked out at $134.07 Bn around the same time as the BTC and ETH topped out this year.

Since then, it has been a downward slope, accelerated by FED's first 75 bps hike announcement in June.

FED rate hike 2022 history - Forbes

So far, the price behavior has been consistent. Rising prices in an environment with constant stable outflows reveals divergences that suggests price is not sustainable as no new money is coming in to prop things up.

With the recent FTX collapse, we are seeing more money leaving the space.

Stablecoin shuffle

USDT BUSD USDC Marketcap - Sanbase

If we break the marketcap down and take a look at things internally, we can observe that there has been a shuffling of stables.

In particular, USDC to BUSD ever since Binance announced that they will auto convert USDC deposits to BUSD.

This move may have impacted Circle (company behind USDC), with a significant loss according to this article by Cointelegraph.

Following the recent FTX bust, Tether has seen a huge exodus while BUSD and USDC continues to climb.

Stablecoins self-custody

USDT BUSD USDC Supply outside of exchanges- Sanbase

If there's one major lesson the recent events have taught us, it's self-custody.

Market learns fast as we saw huge spikes in Supply outside of Exchanges for USDC and BUSD recently.


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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