Bitcoin has had a historic run in recent months, surging to unprecedented heights and capturing the attention of investors and traders around the world. A recent development in the market has shed light on the role of stablecoins in this surge. The rotation of stablecoins into Bitcoin has been identified as a key factor in the recent Bitcoin pump to $29,000.
According to Glassnode data, the stablecoin supply ratio oscillator has increased to 1.9, with a low of 1.7, indicating a significant rotation of stablecoins into Bitcoin. The increase in liquidity and demand has resulted in the upward movement of Bitcoin’s price.
Stablecoins on exchanges are approaching $20 billion, which is the same level as in April 2021. However, the month of April saw almost $1.5 billion worth of stablecoins leaving exchanges, which is a much smaller amount compared to the previous month of March, which saw almost $10 billion leave exchanges.
In related news, Circle Treasury bonds have reported that from April 20 to April 27, Circle issued a total of $700 million in USDC, redeemed $1.1 billion in USDC, and reduced circulation by about $500 million. USDC has a total circulation of $30.5 billion and reserves of $30.7 billion, including $5.2 billion in cash and $25.5 billion in short-term U.S. Treasury bonds.
The growing popularity of stablecoins has not gone unnoticed by regulators, who are concerned about the potential risks associated with them. The regulation of stablecoins is still a topic of debate, and it remains to be seen how regulators will approach this issue.
In conclusion, the recent Bitcoin pump to $29,000 was aided by the rotation of stablecoins into Bitcoin. The impact of stablecoins on the cryptocurrency market is becoming increasingly significant, and their popularity is growing among investors and traders. However, the regulation of stablecoins remains a topic of concern for regulators, and it remains to be seen how this issue will be addressed.
Source: https://azcoinnews.com/april-sees-1-5-billion-worth-of-stablecoins-leave-exchanges-as-traders-seek-market-stability.html
