Following Donald Trump’s victory in the US presidential election and the Federal Reserve’s (Fed) 25bp cut on November 7, the inflow of stablecoins into cryptocurrency exchanges is rapidly increasing.
ERC-20 Stablecoin Flood Exchange
According to data from market intelligence firm CryptoQuant, $9.3 billion worth of ERC-20 stablecoins were deposited into cryptocurrency exchanges following the results of the US presidential election on November 6.
“This is the second largest inflow of ERC-20 stablecoins since they were first introduced,” CryptoQuant explained in a post to X on November 7.
“Cryptocurrency markets are likely to experience another bullish rally if the current large inflows initiate a similar upward trend.”
Of the total $9.3 billion, Binance’s share was about $4.3 billion and Coinbase’s was about $3.4 billion.
Historically, large-scale exchange inflows of stablecoins have preceded price increases. For example, prior to the 2021 bull market, there were stablecoin inflows that occurred between September 2020 and February 2021.
Most recently, as stablecoin inflows increased between January and early March of this year, the price of Bitcoin (BTC) hit an all-time high before the Bitcoin halving.
ERC-20 stablecoins are flowing into exchanges. Source: CryptoQuant
relevant: How much can the price of Bitcoin rise before Trump takes office?
Stablecoin inflows surge as traders expect more upside.
The cryptocurrency community believes that the 2024 US election results usher in a new era for the cryptocurrency market.
In a note to investors, QCP Capital expressed confidence that Bitcoin’s positive momentum will continue as the market heads into 2025.
Markets are now looking forward to “fiscal concerns, including President Trump’s proposed 60% tariffs on China and rising national debt,” QCP Capital added in a follow-up note.
“We expect BTC to have a lower risk premium compared to stocks, potentially allowing it to outperform other risky assets.”
Meanwhile, the Coinbase Premium Index, an indicator that tracks the difference in Bitcoin prices between Coinbase and Binance, surged to 0.098 on November 6, its highest since April 14.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
Commenting on this indicator, crypto community Cobak said, “This means that US demand for Bitcoin is growing due to large inflows into spot ETFs from giants like BlackRock.”
This index suggests that Bitcoin’s bullish momentum may continue and lead to a sustained market rally.
“Now all eyes are on how Trump’s cryptocurrency stance will shape the markets!”
Meanwhile, US-based sports Bitcoin ETFs continued to see massive inflows, with more than $1.38 billion pouring into these investments on November 7, according to data from SoSoValue.
Of these, $1.1 billion of inflows went into BlackRock’s spot Bitcoin ETF (IBIT), with inflows turning positive after two consecutive days of total outflows of $113.3 million. This is the largest influx since January.
Total Spot Bitcoin ETF Flows. Source: SoSoValue
Now, market participants are expecting more funds to flow in the coming days, along with rising Bitcoin prices, as the market prepares for a new cryptocurrency era during Trump’s presidency.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.