- Tether and USDC on-chain metrics reveal market participants are converting their stablecoins into Bitcoin, a bullish sign for BTC.
- The stablecoin supply on exchanges signals buying power across crypto trading platforms, fueling demand for Bitcoin and altcoins.
- Circle CEO Jeremy Allaire built a case for Chinese Yuan-backed stablecoins in an interview with The South China Morning Post.
Stablecoins with the largest market capitalization in the crypto ecosystem, USD Tether (USDT) and USD Coin (USDC) signal upcoming volatility in Bitcoin and altcoin prices through on-chain metrics.
When anomalies in USDT and USDC suddenly appear, it is considered a vital alpha sign for market participants. Interestingly, Circle CEO Jeremy Allaire, who considers stablecoins superior to Central Bank Digital Currencies (CBDCs), built a case for Chinese Yuan- backed stablecoins in a recent interview.
Also read: XRP social dominance explodes with likely price rally in the altcoin
Tether, USDC signal incoming volatility in crypto prices
Based on data from crypto intelligence tracker Santiment, there are anomalies in the on-chain metrics of Tether and USDC. This is considered a sign of upcoming volatility in Bitcoin and crypto prices.
A validator metric called the mean dollar invested age, indicates whether an upswing in crypto markets is being validated by dormant coins or not. The current state of the indicator in which, where the curve of the line is moving down, indicates that Bitcoin and crypto prices are expected to increase further in the future.
Mean dollar invested age for USDT and USDC
The movement of older coins that were stagnant in owners’ wallet is a bullish sign for crypto.
Another key on-chain metric is the absolute holdings of wallets with $100,000 to $10 million in stablecoins. As the holdings of these wallets increase alongside Bitcoin prices, it is considered bullish for Bitcoin and altcoin prices.
Absolute holdings of wallets with $100,000 to $10 million
Circle CEO Jeremy Allaire believes stablecoins are superior to CBDCs. However, in an interview with The South China Morning Post, Allaire recommended Beijing work on its Chinese Yuan-backed CBDC to internationalize its currency.
According to Allaire, stablecoins and CBDCs are complimentary. Allaire said,
If central banks are going to upgrade their own systems to move away from legacy technology into more modern distributed ledger technology, that’s great. There’s a whole bunch of things that are useful from that, but I view that as very different than the work that the private sector does to innovate on the public internet.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.