On-chain data shows that exchanges have recently been receiving stablecoin deposits consistently, which may be beneficial for Bitcoin and other digital assets.
The net flow of stablecoin exchanges has recently maintained positive growth.
As an analyst pointed out in a CryptoQuant Quicktake article, stablecoins have recently been flowing into exchanges. The relevant on-chain metric here is 'net flow of exchanges', which tracks the net amount of a specific asset entering and exiting wallets associated with centralized platforms.
When the value of this indicator is positive, it means that investors are net depositing tokens to exchanges. This trend indicates that holders wish to trade the asset.
On the other hand, a negative value for the indicator means that investors are more willing to hold cryptocurrencies, as they keep the tokens in their own custody. The impact of these trends on the broader industry and the asset itself may vary, depending on the specific type of tokens involved in the outflows/inflows.
For volatile assets like Bitcoin, a positive net flow may be detrimental to the price, as it indicates that holders are looking to sell. BTC is also one of the main conversion points of capital for the entire industry, so selling BTC may also be a bad sign for other tokens.
Stablecoin deposits also mean that traders want to sell them, but since their price remains stable around $1, selling does not have a 'bearish' effect on them.
Like Bitcoin, stablecoins serve as a gateway for capital entering the industry. More specifically, investors will allocate funds to stablecoins when they want to avoid volatility associated with other assets.
These holders typically plan to invest in more volatile tokens, and once they are ready, they will transfer these fiat-pegged tokens to exchanges for trading. This naturally creates buying pressure on any asset they turn to. Therefore, positive net flow of stablecoin exchanges is considered beneficial for Bitcoin.
Now, here is a chart shared by quantitative analysts showing the recent trend of net flow of stablecoins to exchanges:
As seen from the chart, the net flow of stablecoin exchanges has mostly been in the positive territory over the past few weeks. In addition to these inflows, Bitcoin continues to set new highs, so these stablecoin deposits have likely been a fuel for this asset.
The value of this indicator has recently continued to show strength, suggesting that investors have not yet finished accumulating BTC. If the earlier trend continues, the latest inflow of stablecoins may extend the upward trend and possibly help the asset eventually break through the dream target of $100,000.
Bitcoin price
Bitcoin dipped below the $96,000 level yesterday, but it seems that the currency has rebounded, with its price around $98,400.