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STABLECOIN LIQUIDITY IS INCREASING, WHAT DOES THIS MEAN? (CRYPTOQUANT)
Rising stablecoin liquidity could lead to increasing prices for crypto assets. Here’s why.
Stablecoin dynamics are flashing positive, reaching record highs and boosting liquidity within the crypto market. As historical data shows, this is good news for bitcoin (BTC) and the entire crypto industry because more liquidity often correlates with higher prices.
A recent CryptoQuant report revealed that the total market capitalization of major USD-backed stablecoins now stands at $169 billion, representing a 31% or $40 billion increase since the beginning of the year. This growth caused liquidity in the crypto market, as measured by stablecoin value, to reach a record high in late September.
Stablecoin Liquidity is Increasing
The increasing liquidity can be seen in higher stablecoin balances on centralized exchanges. Tether USD (USDT), which continues to dominate the stablecoin market, has been the major driver of this growth.
The total USDT (ERC20) balances on centralized exchanges hit a record high of 22.7 billion this month, growing by 54% or $8 billion year-to-date.
CryptoQuant also noted that roughly $8.5 billion USDT issued on the Tron network is currently held on centralized exchanges, which is a good sign.
“Larger balances of stablecoins on exchanges are positively correlated with higher Bitcoin and crypto prices,” the market analytics platform stated.
This bull cycle started in January 2023, and since then, the total amount of USDT (ERC20) on centralized exchanges has grown from $9.2 billion to $22.7 billion, a whopping 146% increase.
The dominance of USDT has led the asset to amass a 71% share of the stablecoin market, with its closest rival, USD Coin (USDC), following with 21%. USDT’s market cap is nearing $120 billion, up 30% or $28 billion since the beginning of 2024, while USDC has a cap of $36 billion, representing a 44% or $11 billion growth year-to-date. CryptoQuant said USDT and USDC have accounted for almost all the net stablecoin growth recorded this year.
A Potential Bitcoin Rally
Interestingly, USDT and USDC have continued to increase monthly, although slower than earlier this year. An increased pace in the monthly growth of these assets’ market caps could signal a new rally for BTC and crypto prices, especially since the leading cryptocurrency has been flat.
While USDT and USDC continue to dominate, new players are emerging. Ripple Labs, the developer of the XRP Ledger, recently launched a USD-backed stablecoin, RLUSD. Since late September, RLUSD has already amassed a market cap of $47 million, and analysts say the asset has the potential to grow significantly.
@ Newshounds News™
Source: CryptoPotato
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RIPPLE: FORMER EXECUTIVE EXPLAINS WHY XRP IS SUPERIOR TO BITCOIN
Despite the dominance of the leading cryptocurrency, one former Ripple executive has recently explained why he believes XRP is superior to Bitcoin.
Specifically, Matt Hamilton, the former director of Developer Relations at RippleX, discussed the facets that edge out XRP when compared to the much more popular BTC.
The year has been a vital one for cryptocurrencies, and mostly because of the continued rise of Bitcoin. Yet, there are many in the industry who believe that the asset may not fare well when compared to its technological counterparts. The question is, does XRP really have an advantage over the industry’s leader?
Ex-Ripple Executive Highlights Why XRP is Better Than BTC
Throughout 2024, Ripple and Bitcoin have had very different years. Where the latter became the first crypto-based ETF to be approved by the US Securities and Exchange Commission (SEC), the agency has reengaged in its years-long legal battle with Ripple.
The two tokens appear to be in completely different positions, yet one expert has a strong opinion on which could be perceived as better.
Former Ripple executive Matt Hamilton has recently discussed the ways in which he believes XRP is superior to Bitcoin. Speaking during a recent podcast appearance, Hamilton did not mince words when comparing the two. Specifically, he noted there are reasons why Bitcoin has some key drawbacks, and XRP could eventually reach a mass audience.
Hamilton noted that XRP has a massive scalability advantage to BTC. The leading crypto (BTC) has a low throughput, which works against mass adoption hopes. With a network that can only handle as much as 10 transactions, large-scale, cross-border payments would not be possible under BTC.
Interstingly, Hamilton said that if Bitcoin was the world’s only currency for transactions, a person would only be able to make two transactions throughout their lifetime due to the scalability concern. Although it has addressed the issue, it is far behind the competition.
The XRP Ledger (XRP:) can handle mass transactions. The network throughput increased from 1,500 TPS to 3,400 TPS in the last year. Moreover, that coincides with Hamilton’s second key defense of XRP’s superiority: transaction costs.
s urged policymakers to adopt sandbox-based frameworks to enhance regulatory clarity for DeFi innovations and address key risks.
This week, the World Economic Forum (WEF) backed a “sandbox-first approach” for DeFi adoption, urging regulators to use regulatory sandboxes to build innovation and manage risks in DeFi.
In other news, IDA Finance announced its integration with Chainlink’s blockchain services for its upcoming HKDA stablecoin, aiming to improve transparency and security in cross-chain operations.
WEF backs “Sandbox-first approach” for DeFi adoption
The World Economic Forum (WEF) has urged regulators and policymakers to conduct DeFi-related innovations and experiments with regulatory sandboxes.
The statement from the WEF aims to focus on risk mitigation and the assurance of transparency to create a tailored approach to DeFi’s regulation.
In its assessment of nine economies worldwide, the WEF identified this need for countries like the United States, the United Kingdom, Japan and the United Arab Emirates.
The WEF said that countries adopting “a nimble, sandbox approach” had shown signs of advancing DeFi innovation by addressing inherent risks in the DeFi ecosystem.
IDA integrates HKDA stablecoin with Chainlink for secure cross-chain use
On Oct. 9, IDA Finance, a Hong Kong-based issuer of digital assets, announced that it would be integrating Chainlink’s blockchain services into its forthcoming HKDA stablecoin.
The collaboration aims to improve transparency and security of cross-chain operations by integrating Chainlink’s oracle services into the Hong Kong dollar-backed stablecoin.
As part of the integration, implementing Chainlink’s Proof-of-Reserves (PoR) technology will enable onchain verification of assets backing IDA Finance’s HKDA stablecoin.
By establishing a medium for the monitoring of HKDA’s collateral, the PoR technology will help mitigate risks of insufficient reserves and function to provide credibility and security for holders.
@ Newshounds News™
Source: CoinTelegraph
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🌍NEW INDUSTRY BILLIONAIRES | Youtube
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Source: Seeds of Wisdom Team RV Currency Facts
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🌍 RIPPLE’S XRP INVOLVED IN ANOTHER LAWSUIT | Youtube
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Source: Seeds of Wisdom Team RV Currency Facts
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