Stablecoins are seeing a downturn, particularly in the domain of big investors or “whales.” Despite this dip, Tether, a leading stablecoin, stands resilient. While the crypto ecosystem begins recovering from the previous year’s lows, stablecoins grapple more than their counterparts.
Whales have lately reduced their stablecoin holdings, hinting a weaker buying power than when Bitcoin stood robust above $30,000 in June. Santiment’s recent report on Twitter indicates that their current activity is at its lowest in the past six months. For a potential reversal, eyes are on the resurgence of these $5M+ whale wallets.
🐳🤑 Whales have been dropping #stablecoins, indicating that their buying power isn't quite as strong as when #Bitcoin was above $30K back in June. Now at the lowest level in 6 months, look for $5M+ whale wallets to increase again to signal a turnaround. https://t.co/mquq4vLZ9M pic.twitter.com/BfuvHbxvcs
— Santiment (@santimentfeed) September 19, 2023
Stablecoins have been experiencing a rocky road, plummeting to their lowest market capitalization in over two years. Notably, these tokens are tied to real-world assets, commonly the U.S. dollar. The dollar’s strength or weakness heavily influences its fate. According to a Reuters report, James Butterfill, the head of research at CoinShares, noted that the inclination for dollar-denominated stablecoins directly correlates with the dollar demand. Past fluctuations in the dollar index on interest rate escalations led to notable increases in stablecoin transactions.
CCData’s research establishes a grim landscape for the stablecoin market, projecting its 18th consecutive monthly decline. As of September 14, the market cap stood at $124.4 billion.
Tether, however, is demonstrating a contrarian pattern. The dollar-pegged stablecoin peaked at $83.8 billion in July, as per CoinGecko, breaking its usual trend of staying under the $80 billion mark for the year’s initial months. As of now, it has settled around $82.9 billion.
The resilience of Tether’s value is attributed to its widespread acceptance in specific global regions. Per Reuters, Paolo Ardoino, Tether’s CTO, emphasizes the coin’s paramount significance in emerging markets, especially in Central South America and Central Asia, revealing it “basically runs on Tether.”
For context, as of today, Bitcoin’s value hovers around $27,125.81, reflecting an uptick of 0.96% in the last 24 hours. With a formidable 24-hour trading volume of approximately $14.7 billion, Bitcoin’s market cap reigns supreme at over $528 billion.
