The number of stablecoins getting transferred on to centralized exchanges has surged considerably in the last few days.
The stablecoin influx was not entirely driven by crypto markets rally on 21 June.
Binance.US asked its users to convert their USD holdings to stablecoins.
After witnessing a large exodus from centralized exchanges (CEXs) over the last month, stablecoins made a comeback. According to a tweet by on-chain research firm Unlocks Calendar, the number of stablecoins getting transferred on to exchanges surged considerably in the last few days.
Source: Unlocks Calendar
Demand for stable coins shoots up
Typically, a high influx of stablecoins indicates buying pressure. This is simply because they remain the primary way for traders on non-fiat crypto exchanges to enter and exit trades. Most novice investors prefer to convert their fiat currencies to U.S. dollar-pegged stablecoins like USD Coin [USDC], and Tether [USDT] before opening their positions.
The crypto market got a fresh lease of life after bellwether Bitcoin [BTC] rallied to 30,000, persuading many long-term investors to lock in gains after weeks of HODLing.
However, Glassnode revealed that 21 Junes surge did not solely cause the increase. Rather, the supply has been slowly expanding over a two-week period.
Source: Glassnode
Following the legal action against crypto behemoth Binance by regulators, its American arm, Binance.US suspended all forms of U.S. dollar trading on the platform as part of its transition to a “crypto-only” platform. As a result, users converted their USD to stablecoins to continue trading on the platform.
And while USD withdrawals have been re-enabled on the platform, Binance.US cautioned its users that the relief would be temporary and asked them to convert their USD holdings to stablecoins.
USDT, USDC lead inflows
According to Glassnode, top-ranking stablecoins like USDC and USDT saw their exchange supply surge significantly over the last week.
The share of USDT‘s exchange supply as a percentage of total circulating supply increased from 13.6% on 14 June to 14.5% at the time of writing. Additionally, USDC’s share jumped from 5.5% to 6.4%.
Source: Glassnode
The total stablecoin market cap increased marginally over the past 24 hours to clock $128 billion at the time of writing, as per CoinMarketCap. USDT was the largest stablecoin with a market value of over $83 billion.
The market cap of the second-ranked stablecoin, USDC, topped $28 billion.