Stablecoins like USDT and USDC show a surge, indicating fresh money flowing into crypto after a year, boosting investor confidence.
According to Glassnode, money is making its way into the crypto market through stablecoins (US dollar-pegged tokens) for the first time in over a year. Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Dai (DAI) supplies have surged dramatically, the biggest increase since the Terra crash in May 2022.
Stablecoins have been essential in purchasing cryptocurrencies since 2020. A surge in supply indicates that investors may be preparing to purchase additional cryptocurrencies or make use of them in trading.
Reflexivity research stated that the increase in stablecoin supply signifies more money in the system, which could signal increased investor interest. This expansion corresponds to Bitcoin's price doubling to over $35,000 this year, partially due to hopes of regulatory approvals for a Bitcoin exchange-traded fund in the United States.
The stablecoin market suffered difficulties when Terra's LUNA token fell in May 2022, resulting in large losses. The crypto industry thereafter saw numerous bankruptcies as well as concerns with crypto lenders and exchanges. However, recent stablecoin movements indicate that investor trust is returning.