There is a high demand for stablecoins lately and their buying power could actually predict the next bull run for Bitcoin, as reports in the latest cryptocurrencies news show. The fact that stablecoins have never had more buying power than now shows that we are living in a pinnacle of crypto adoption. Reports from Glassnode show that the high stablecoin buying power is calculated by dividing Bitcoin (BTC) and its market cap by the market cap of all major stablecoins.
In this manner, low SSR indicates that stablecoins have never had more buying power, which the company asserts could be interpreted as a bullish sign.
The ratio now stands at just above 15, which indicates that stablecoins could buy approximately one fifteenth of all Bitcoin. This ratio stood at 88 in March 2018, and in just over two years, the stablecoin buying power increased more than sixfold.
Also, the ratio has two components, so which is to “blame” for the drastic change?
By looking at the high stablecoin buying power, we can definitely see that positive things are coming. The cap for stablecoins has increased from $2.2 billion to $11 billion, while the BTC market capitalization has decreased from $195 billion to $171 billion.
When seen in correlation, these factors could provide a solid uptick for the price of Bitcoin and help it reach new heights. So far, the market capitalization of stablecoins has been increasing but the price of BTC has not kept pace. The correlation between the SSR and the Bitcoin price appears to have broken down around Black Thursday (March 13 2020). In the future, no one knows whether an emerging trend will occur or we will see another debacle for digital assets.
For all we know now, Tether is the largest stablecoin by market cap and USDT is at $9.2 billion in terms of its capitalization, ranking on the 3rd place after Bitcoin and Ethereum. If the influx of money into stablecoins continues, we can definitely see USDT overcoming ETH on the second place – for this to happen, USDT would need to triple its market capitalization and the Tether news should show greater adoption.
DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at [email protected]