Exchange-based stablecoin holdings on the Ethereum and Tron blockchains recently surpassed $70 billion.
The previous all-time high, set during the 2021 bull market, was approximately $60 billion. After hovering around that level for much of the year, exchange stablecoin holdings began to rise sharply in August.
Stablecoins on Exchanges: A Potential Buying Pressure
According to a report published Thursday by CryptoQuant analyst ‘CryptoOnchain’, this metric represents a massive pool of potential buying pressure on exchanges. This figure briefly surpassed $70 billion on September 2nd and is currently fluctuating around $68.3 billion as of Thursday.
The analyst noted that it has a strong correlation with actual cryptocurrency prices. The holdings hit their most recent low of $32 billion in late October 2023, then more than doubled.
Over that same period, Bitcoin’s price surged by roughly 3.3x from its previous price of around $35,000, while Ethereum’s price jumped 2.5x from its level of $1,890.
USDC’s Role in the Rally
A closer look at the data shows that USDT, the largest stablecoin by market cap, accounts for about $53 billion—or 77%—of these exchange holdings. USDC accounts for about $14 billion, or 20%.
CryptoOnchain pointed to USDC’s explosive growth as a key factor. While USDT maintains its top spot with steady growth, the analyst claims that the USDC deposited on exchanges strongly correlates with major cryptocurrency price increases.
Indeed, with rising expectations for a US interest rate cut, USDC on exchanges soared from just $6.8 billion on August 1 to $14 billion in a single month. In contrast, USDT holdings saw little change, rising from $52.6 billion to $53.1 billion during the same period.
CryptoOnchain describes the current buildup of stablecoins on exchanges as an “extremely strong bullish signal.” He states that this capital is ready to be deployed into assets like Bitcoin and altcoins, signaling a powerful rally may be on the horizon.
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