Stablecoins could provide a major tailwind for the current bull market, according to CoinMarketCap’s head of research. Alice Liu told CoinDesk in an interview that the soaring market cap of stablecoins – which now stands at $172 billion – represents a huge pool of “dry powder” that could be quickly deployed to buy Bitcoin and other cryptocurrencies. “While some of them are used in decentralized finance (DeFi) protocols, because the size of this pool of liquidity is so big, the redeployment of these stablecoins could add fuel to any kind of rally in the crypto markets,” she said. “Especially those that are held on exchanges which could be deployed more quickly into the market.” Historically, increases in stablecoin supply have preceded price increases in Bitcoin and other cryptocurrencies. And with exchange balances of stablecoins up 20% this year, that could act as a major tailwind to the bull case. “I think this is a really bullish signal for Bitcoin in particular,” Liu said. “Because it shows that there’s a lot of demand for crypto, and that there’s a lot of money waiting on the sidelines to come in.”

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