- The purchasing power of the market rose as the combined market capitalization of stablecoins peaked
- Bitcoin could benefit from a greater supply of stablecoin whales
The market capitalization of stablecoins included Tether [USDT], Circle [USDC], DAI, and others, grew significantly over the week. This increase was significant for the price increase Bitcoin [BTC] includedSantiment said.
Realistic or not, here it is The market cap of USDC in BTC terms
Buyers prepare for BTC
In a recent post, the on-chain analytics platform explained how the growth implies an increase in the purchasing power of the broader market. However, it was also quickly pointed out that the strength of whales’ stablecoin accumulation has not yet been reflected in the market.
💸The combined market capitalizations of #stablecoins $USDT, $USDC, $BUSD, $DAI, $TUSD& $USDP rose last week, increasing purchasing power #Bitcoin Unpleasant #30K. A more sustainable increase will occur as whales accumulate stablecoins during the period $BTC remains flat. https://t.co/Fh16oIzHUI pic.twitter.com/UX9YjGZNJB
— Santiment (@santimentfeed) October 20, 2023
Santiment also shared that Bitcoin’s price could rise well above $30,000. However, this could only happen if whales start to use their purchasing power. While on-chain data shows that whales currently control around 50% of the total stablecoin supply, a rise in market share could be the boost Bitcoin needs to clear the doubt surrounding its potential hold at the $30,000 level to neutralize.
A look at the Stablecoin Supply Ratio (SSR) highlighted that this metric has been rising recently. Leveraging the range of stablecoins including USDC, USDT, BUSDand the rest, the SSR is the ratio between the supply of Bitcoin and the supply of stablecoins expressed in BTC.
The result of this calculation serves as a proxy for the supply/demand mechanism between BTC and USD. At the time of writing, the SSR was 4.78 between the upper band of 4.88 and the lower band of 3.97 of the Bollinger Bands (BB).
Source: Glassnode
Volatility could explode like whales…
What this means is that inconstancy around the price of Bitcoin falls while its purchasing power increases. Should market participants go all-in on buying BTC, the volatility level could change from contraction to expansion.
Meanwhile, Bitcoin’s 30-day market value to realized value (MVRV) ratio stood at 7.25% at the time of writing. The MVRV ratio is defined as the market capitalization of an asset divided by the realized capitalization. By comparing these values, investors can get an idea of the period of fair value or undervaluation
At the mentioned value, the statistic revealed that the coin’s recent performance has generated good profits for its holders. Still, the market cannot be considered extremely heated at the moment, especially considering how long the price of BTC has remained on the charts below $30,000.
Source: Santiment
How many Worth 1,10,100 BTC today?
Regardless of market sentiment, investors may need to be cautious. Moreover, the supply of stablecoins worth over $5 million owned by whales is only just getting started upwards. If the metric spikes like it did around August, then BTC could be worth a lot more than it currently is.