According to Cointelegraph, the supply growth of USDT, the largest U.S. dollar stablecoin by market capitalization, dropped sharply in June, reflecting reduced liquidity in the cryptocurrency market.
Cryptocurrency custodian Copper reported that USDT’s monthly supply growth was below 1.5% as of June 24, a significant decrease from the over 5% growth in April and May. Fadi Aboualfa, Head of Research at Copper, said:
“This suggests that liquidity flowing into the cryptocurrency market is reducing as Bitcoin and Ethereum face downward pressure, while altcoins remain far behind with little hope of a significant rebound in the short term.”
USDT currently has a market capitalization of approximately $113 billion, according to DefiLlama, and the slowdown in its supply growth shows that inflows into the cryptocurrency market are decreasing.
USDT circulating supply changes year-to-date in 2023 (Source: DefiLlama)
But it is worth noting that according to data shared by Lucas, head of research at blockchain analysis company IntoTheBlock, centralized exchanges’ net inflows of USDC stablecoins hit a one-year high on Monday, reaching $228 million. He wonders if this means people are depositing stablecoins on exchanges to buy crypto on dips.
Source: Lucas Bitcoin market outflows
The Bitcoin market has experienced significant daily outflows recently, with net outflows from U.S. Bitcoin spot exchange-traded funds (ETFs) totaling more than $540 million last week, according to analysis by Copper. Bitcoin prices have fallen more than 10% over the past 30 days, with the currency trading at around $61,700 at press time. Aboualfa explained:
“While the market is paying attention to ETF dynamics, the price of Bitcoin is following a consistent path relative to these flows. While this is not a measure of bullish demand, it indicates whether investors are less willing to sell them at a discount. of Bitcoin, even as they anticipate a plunge.”
Bitcoin prices are up 37% since the Bitcoin Spot ETF began trading in January this year. "Bitcoin is still trading within acceptable lows and highs relative to holdings, suggesting there is room for downward pressure," Aboualfa said.
According to a report by Zombit earlier today, the U.S. Bitcoin spot ETF recorded a net inflow of approximately $31 million yesterday, halting a seven-day streak of net outflows.
U.S. Bitcoin Spot ETF Daily Fund Flows (Source: SoSo Value)
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