Stablecoins, i.e. cryptos that are linked to other assets or currencies, do not change their value depending on market volatility. Therefore, it can be considered a safe haven and can also be used to trade other cryptos. Currently, the crypto markets are experiencing immense volatility as the prices of popular cryptos like Bitcoin, Ethereum, etc. drop sharply going north and south.
Also, the market cap of all stablecoins has fallen sharply over the past 15 months. Just prior to the collapse of the Terra ecosystem in May 2022, the stablecoin market cap had hit highs of $164.29 billion, of which USDT had a nearly 50% stake of $80 billion. Since the market crash, the stablecoin market cap also started to decline, which is still going on today.
Interestingly, USDT does not appear to have lost value as its market cap is increasing sharply.
Since the beginning of the year, the Bitcoin price has been subject to extreme price fluctuations, which has kept the entire crypto market in suspense. The altcoins usually tend to follow the star crypto and hence most of them remain within a consolidated trend. Meanwhile, whales and sharks continue to accumulate stablecoins, which currently have a higher supply rate than they have seen in a while.
100k to 10m USDT, USDC, BUSD, DAI, TUSD and USDP addresses have been steadily increasing over the past two months. This could indicate that the whales and sharks may be preparing for the next bull market and securing their funds in the stablecoins. Of all other stablecoins, DAI is the most widely used, followed by USDT, USDC, BUSD, etc.
Also, according to data from Santiment, the number of whale transactions for USDT and USDC has increased significantly since the beginning of the month, followed by BUSD. In addition, the average investment age of the dollar, i.e. the average age of all coins in the chain weighted by the purchase price, is also increasing quite significantly. This suggests that the tokens in the wallets of whales and sharks are aging without fear of liquidation.
The stablecoins statistics indicate the upcoming uptrend in the crypto space. Once the negative volatility stops, the bulls are expected to take over the rally and push the price higher.
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