Total stablecoin supply increased shortly after the recent bitcoin rally began in earnest, according to The Block's Data Dashboard.
On Oct. 16, a false report that a spot bitcoin ETF had been approved ignited what has become a sustained multi-week rally for the world's largest digital asset by market capitalization. Around the same date, data from The Block showed an increase in stablecoin supply, with most of the newly minted coins swelling into USDT +0.01% .
Net capital inflow
According to analysts at Glassnode, the increased total stablecoin supply is a signal for net capital inflow into the entire cryptocurrency sector. "Stablecoins represent investor demand for speculative capital," a Glassnode report sent to The Block stated.
Glassnode analysts stated how "we are now seeing a break above Glassnode's Altseason Indicator, which shows all three assets, bitcoin, ether, and combined stabelcoins posting upticks."
"Bitcoin is leading for net inflows, and stablecoins have had net outflows until very recently," the Glassnode analysts said. Until recently total stablecoin supply has declined throughout the year-to-date, following its peak in May 2022, just before the TerraUSD collapse.
"Now, all three assets, bitcoin, ether, and total stablecoins are now in positive territory, all increasing," the Glassnode analysts added.
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