Total stablecoin supply growth signals increased capital inflow, analysts say

Quick Take

  • Total stablecoin supply has increased since mid-October, suggesting the crypto sector is experiencing net capital inflow.

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.


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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.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].


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