The number of stablecoins on centralized exchanges has dropped to its lowest level. Since May 2021, this is a sign of increasing investor caution on risk.
As of Monday, the exchange’s stablecoins balance stood at $21.06 billion, according to Glassnode, a blockchain analytics firm that tracks BUSD, GUSD, HSUD, DAI, USDP, EURS, SAI, sUSD, USDT and USDC balances.
That number has dropped by more than half. since reaching a record high of more than $44 billion in mid-December.
“This may be a reflection of the risk aversion towards stablecoins after Paxos was ordered by regulators to stop issuing BUSD and USDC that have recently pegged,” said Dick Lo, founder and CEO of TDX Strategies. The market value of BUSD and USDC is steadily declining.”
Paxos stopped minting BUSD in February. Following orders from New York regulators, USDC, the world’s second-largest stablecoin, experienced price volatility in March after Circle revealed it held cash balances at Silicon Valley banks. which was experiencing a crisis at that time
The dwindling stablecoin balance coincides with the rise in Bitcoin price and may indicate that this could be a spin-off of stablecoins and that BTC remains the main driver of the cryptocurrency’s 70% increase in cryptocurrencies. this year While the market has yet to see new money flowing in
“Stablecoin balance on CeFi continues to shrink. With only a small increase in new capital flowing into the ecosystem,” the technology firm SignalPlus said in its daily market report.
“In addition, user activity on DeFi/NFT/GameFi Still going downhill Although spot prices recover This reinforces our cautious view on crypto prices in the near future,” said SignalPlus.
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