Amid renewed bullish action on cryptocurrency markets, stablecoins like Tether (USDT) are flooding exchanges to hit a new historical high in terms of allocation.
According to market data provider CryptoQuant, stablecoin holdings on global crypto exchanges broke a new all-time high on Jan. 28, surpassing $4.7 billion.
This amount makes up a significant part of the total stablecoin market capitalization, which is estimated at around $35.2 billion at the time of writing, according to data from CoinGecko. The total trading volume of all stablecoins is now evaluated at around $111 billion, with Tether (USDT) alone making up $103 billion of these volumes.
Alongside stablecoins’ holdings on crypto exchanges hitting a new all-time high, the amount of inflow stablecoin transactions also appears to be growing at the time of writing. On Jan. 28, the number of inflow stablecoin transactions amounted to nearly 33,000 transactions, up from 30,000 transactions on Jan. 27.
Massive stablecoin inflows are often regarded as a short-term catalyst for Bitcoin, suggesting that sidelined capital is moving back into BTC. Specifically, fiat-pegged stablecoins like USDT are becoming an increasingly useful tool for traders to make deposits on crypto exchanges, allowing them to easily buy and sell millions of dollars worth of Bitcoin. As such, growing stablecoin allocations on crypto exchanges may be associated with increasing buying power.
As previously reported by Cointelegraph, the start of Bitcoin’s rally in October 2020 was driven by growing stablecoins’ inflows onto exchanges.
At publishing time, there is a notable upward trend on crypto markets, with the majority of the top-10 coins by market cap posting significant growth and Bitcoin returning above $32,000.