Cryptowhales across the board have seemingly taken more conservative positions in stablecoins since the start of the bear market. This has evolved into larger holdings of dollar-pegged cryptocurrencies that have very low volatility. These digital assets have since become a safe haven for investors looking to escape the highly volatile tokens but still want to keep their funds in the crypto market.
Crypto whales switch to stablecoins
Usually there has been a significant increase in the stablecoin holdings of the top Ethereum whales, but this trend of switching into stablecoins does not seem to be limited to Ethereum whales alone. Data shows that whale holdings across 5 blockchains are increasingly trending towards stablecoin holdings.
The 5 blockchains in this report are Ethereum, Fantom, BNB Chain, Avalanche and Polygon and takes a look at the holdings of the top 1,000 whales. The holdings of the biggest whales in all these chains are mostly in the chain’s native tokens, but stablecoins like USDT and USDC are becoming increasingly important to them.
For the top 1,000 ETH whales, USDC and USDT currently account for $842 million (26.9%) and $710 million (22.7%) of their holdings, respectively. BNB chain whales trended even stronger, with BUSD accounting for 41.19% ($365 million) and USDT 16.22% ($144 million) of their holdings.
USDT market dominance at 7.68% | Source: Market Cap USDT Dominance on TradingView.com
Fantom (FTM) whales were more interested in USDC with 30.75% ($12 million) of their holdings in stablecoin and 4.67% ($1.8 million) in fUSDT. Avalanche whales hold 74.2% ($265 million) of their stocks in USDT and 5.68% ($20.3 million) in USDC. Polygon whales have the least allocated stablecoins at just 6.09% ($19.1 million) in USDC.
Time to flee for safety reasons?
Whale stocks and their investment trends can often influence investor sentiment because they show what these big holders think about the crypto market. Their recent move to stablecoin holdings shows that they expect market prices to go much lower in the near future.
This is not necessarily out of place as indicators show that the crypto market has yet to bottom. In previous bear markets, prices for digital assets like Bitcoin and Ethereum have each fallen more than 80%, putting Bitcoin’s market bottom at around $13,000.
With that and the market following Bitcoin’s price, when it’s not down, it’s a good time to seek safe haven in these digital assets. It helps investors preserve the value of their funds while they wait for better market conditions to start reinvesting.
Featured image of Schroders, chart from TradingView.com
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