A recent surge in stablecoin market capitalization could be a precursor to a potential uptrend in bitcoin and other major cryptocurrencies, according to a crypto analyst.
Julio Moreno, Head of Research at CryptoQuant, told Cointelegraph that the increasing market cap of stablecoins is a critical factor in driving cryptocurrency price growth, as they provide liquidity to crypto markets.
“Stablecoins on exchanges have grown, with USDT reserves on centralized exchanges also reaching a record-high of $22.5 billion so far in 2024,” Moreno said, citing data from CryptoQuant.
The analyst pointed to data that showed the stablecoin market capitalization has reached a record high of $169 billion this year. “The total market capitalization of stablecoins is positively correlated with higher bitcoin prices,” he added.
A CryptoQuant analysis post from Monday stated that the net inflow of stablecoins onto centralized cryptocurrency exchanges can serve as an important indicator for predicting bitcoin’s future price.
“Interestingly, we observed a high correlation between bitcoin’s price and net inflows of stablecoins to exchanges in September. In particular, stablecoin net inflows influenced the price increase observed towards the end of September,” the post added.
