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The chief executive of digital asset insights firm CryptoQuant says stablecoins are witnessing increased adoption via use-case expansion.
CryptoQuant’s Ki Young Ju tells his 368,500 followers on the social media platform X that the total market cap of stablecoins is exploding for reasons other than digital asset trading on exchanges.
The on-chain analyst’s data shows that only about one in five stablecoins are being used to buy and sell crypto.
“In September 2021, exchange stablecoin reserves exceeded $30 billion. From this point, I considered the stablecoin market to be sufficiently grown, making comparisons from this time valid.
Today, the stablecoin market cap is $166 billion, mainly used for storage or remittances, with only 21% held on exchanges (down from over 50% in 2021).
The total stablecoin market cap is growing, but most of the new supply is used for purposes other than trading on exchanges.”
Ki Young Ju notes that people across the globe are beginning to realize the advantages that stablecoins offer in moving money beyond borders.
“Mostly for remittances across all countries. Stablecoin adoption in Africa is crazy as far as I know.”
With stablecoins being increasingly used for cross-border payments and potentially as a store of value for citizens of nations witnessing massive currency devaluation, Ki Young Ju says Bitcoin (BTC) and crypto need to find another liquidity source to boost prices.
“Stablecoins alone can’t provide enough buy-side liquidity for Bitcoin.
The BTC-to-stablecoin ratio is 6.05, meaning BTC reserves are six times higher than stablecoins, similar to the last all-time high.
ETF (exchange-traded fund) flows and Coinbase USD liquidity will be crucial for the next few months.”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/creativeneko/NeoLeo
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