Stablecoin Holdings, which is exchange-based for Ethereum and Tron blockchains, has recently surpassed $70 billion.
The previous all-time high set in the bull market in 2021 was around $600 billion. After hovering that level for most of the year, Exchange Stablecoin Holdings began to rise sharply in August.
Exchange Stubcoin: Potential Purchase Pressure
According to a report published Thursday by CryptoQuant analyst CryptoonChain, the metric represents a large pool of potential purchase pressures for exchanges. The figure temporarily surpassed $70 billion on September 2nd, and currently fluctuated by around $68.3 billion as of Thursday.
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Analysts pointed out that it has a strong correlation with actual cryptocurrency prices. The holdings reached its recent low of $32 billion in late October 2023, more than doubled since.
During the same period, Bitcoin prices skyrocketed about 3.3 times from the previous price of around $35,000, while Ethereum prices jumped 2.5 times from the $1,890 level.
The role of USDC in the rally
A closer look at the data shows that USDT, the largest stubcoin by market capitalization, accounts for around $53 billion (77%) of these exchange holdings. USDC accounts for around $14 billion, or 20%.
CryptoonChain pointed out the explosive growth of USDC as a key factor. While USDT remains at the top with stable growth, analysts argue that USDCs deposited on the exchange are strongly correlated with rising prices for major cryptocurrencies.
In fact, US interest rate cuts have skyrocketed to $14 billion in a month, from just $6.8 billion on August 1st. In contrast, USDT Holdings saw little change that rose from $52.6 billion to $53.1 billion over the same period.
CryptoonChain describes the current accumulation of Stablecoins in exchange as “a very powerful bull signal.” He says the capital is ready to deploy to assets such as Bitcoin and altcoin, indicating that a strong gathering could be on the horizon.
