The CEO of digital asset insights firm CryptoQuant said stablecoins are seeing increasing adoption through expanding use cases.
CryptoQuant’s Kiyoung Joo told his 368,500 followers on social media platform
According to data from Onchain analysts, only about one in five stablecoins are being used to buy or sell cryptocurrencies.
“In September 2021, exchange stablecoin holdings exceeded $30 billion. From this point on, we judged that the stablecoin market had grown sufficiently, so we decided that comparison from now on was appropriate.
The current stablecoin market capitalization is $166 billion, primarily used for storage or remittance, with only 21% held on exchanges (down from more than 50% in 2021).
“Although the overall stablecoin market capitalization is growing, the majority of new supply is used for purposes other than exchange trading.”
Joo Ki-young points out that people around the world are starting to realize the benefits that stablecoins offer for moving money across borders.
“It is mainly used for remittances in all countries. “As far as I know, stablecoin adoption in Africa is crazy.”
As stablecoins are increasingly used for cross-border payments and as stores of value for citizens of countries witnessing potentially massive currency devaluations, Bitcoin (BTC) and cryptocurrencies should look for another source of liquidity to boost their prices. Joo Ki-young said:
“Stablecoins alone cannot provide sufficient buy-side liquidity for Bitcoin.
The BTC to stablecoin ratio is 6.05. This means BTC holdings are six times higher than stablecoins, similar to previous all-time highs.
Exchange-traded fund (ETF) flows and Coinbase USD liquidity will be critical in the coming months.”
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