Nearly $140 Billion in Stablecoins Poised to Re-enter Crypto Markets

Crypto markets stabilized in July with no final capitulation event as many had predicted. There is now a large sum sitting in stablecoins waiting to re-enter markets when the time is right.

Three of the top ten crypto assets by market capitalization are stablecoins. Their combined value at the time of writing is $138 billion, according to CoinGecko.

Tether’s USDT is the third largest cryptocurrency with $66 billion, Circle’s USDC is fourth with $54.4 billion and Binance’s BUSD is seventh with $17.8 billion.

On July 31, Binance CEO Changpeng Zhao pointed out that this was a lot of money sitting on the sidelines, waiting to get back in.

“If people wanted to get out of crypto, most won’t hold stablecoins.”

3 of the top 10 are stable coins, meaning there is a lot of “fiat” sitting sidelines, ready to get back in.

If people wanted to get out of crypto, most won’t hold stablecoins.

— CZ Binance (@cz_binance) July 31, 2022

Cash on the sidelines

Those needing to exit crypto would have converted back into fiat and withdrawn from exchanges. This largely happened in mid-June when over $400 billion exited markets in a week.

Since then, crypto markets have been generally range-bound with a recent uptick to push total capitalization to $1.17 trillion, 33% up from its cycle bottom of $875 billion.

The amount sitting in the top three stablecoins works out at 12% of the entire crypto market capitalization. It’s still historically high despite having fallen over the past month or so with the shrinking Tether supply and minor market rally.

“Stablecoin dominance” (stable mkt cap vs. total mkt cap) is at 13%.

First time crypto hit $1 trillion mkt cap the ratio was at 3%.

— DeFi Surfer (@DeFiSurfer808) July 30, 2022

The elephant in the room is inflation. With most of the world suffering a cost of living crisis, retail traders simply don’t have the same amount of money to throw into high-risk assets such as crypto. Until there is a significant reduction in inflation, crypto markets are unlikely to turn bullish.

High inflation is another reason to hold stablecoins for those in countries that are looking to the USD as a hedge against their own currencies. Several Latin American nations have double-digit inflation and stablecoins are in high demand.

Crypto markets cooling off

Following a weekend of consolidation, there has been a slight retreat in total market cap during the Monday morning Asian trading session. Markets are down 1.2% to $1.13 trillion at the time of writing.

Bitcoin has dropped 1.7% on the day to trade at $23,323 whereas Ethereum is down 0.6% to $1,687, according to CoinGecko. Most altcoins today are in the red with a few seeing double-digit percentage losses.

The post Nearly $140 Billion in Stablecoins Poised to Re-enter Crypto Markets appeared first on BeInCrypto.

Related Posts

Crypto-focused venture firm Dragonfly acquires hedge fund: Bloomberg

Amid the grueling bear market for Bitcoin, Ether and altcoins, the cryptocurrency industry is undergoing consolidation. Cryptocurrency venture firm Dragonfly has acquired a digital asset-focused investment fund…

Binance distances from WazirX as Indian regulators keep chasing crypto

The ownership of WazirX became a hot topic as CZ claimed the deal never went through, but three years later, there’s still no clarity. The Twitter exchange…

Saddle Finance Redefines Trading of Pegged Value Assets with Ease And Security

Are you ready to Saddle up? A decentralized finance platform architectured to facilitate efficient trade between pegged crypto assets is now one of the most prominent names…

How Revolut Will Launch New Crypto Platform, Cyprus Grants Authorization

Per a report from Atlfi, fintech company Revolut will be able to offer more crypto products to its customers. The one-stop app for “all things money” has…

Biggest Movers: SHIB Remains Near 3-Month High, Whilst LEO Hits 2-Week High 

Shiba inu remained close to a three-month high to start the week, after breaking out of a key resistance level over the weekend. The surge of the…

Bitcoin Dominance Rate (BTCD) Continues to Fall as Ethereum (ETH) Increases

The Bitcoin dominance rate (BTCD) has broken down from its long-term bullish structure, while the ETH/BTC chart shows potential for upside. Between May and Dec 2021, BTCD…

Generated by Feedzy