Stablecoin inflows to cryptocurrency exchanges are seeing a sharp rise after Donald Trump’s win in the United States presidential race and the 25 basis point cut by the Federal Reserve on Nov. 7.
ERC-20 stablecoins flood exchanges
Following the US presidential election results on Nov. 6, a substantial $9.3 billion worth of ERC-20 stablecoins were deposited into cryptocurrency exchanges, according to data from market intelligence firm CryptoQuant.
“This marks the second largest influx of ERC-20 stablecoins since their inception,” CryptoQuant explained in a Nov. 7 post on X.
“If the current massive influx initiates a similar upward trend, the cryptocurrency market is likely to experience another bullish rally.”
Of the total $9.3 billion, Binance’s share was approximately $4.3 billion and Coinbase comprised around $3.4 billion.
Historically, large-scale inflows of stablecoins to exchanges have precedes price rallies. For example, the 2021 bull run was preceded by an influx of stablecoins that occurred between September 2020 and February 2021.
Most recently, rising stablecoin inflows between Jan and early March this year saw Bitcoin (BTC) price break previous all-time highs before the Bitcoin halving.
ERC-20 stablecoin flows into exchanges. Source: CryptoQuant
Stablecoin inflows spike as traders expect more upside
The crypto community believes that the 2024 US election results ushered in a new era for the crypto market.
In a note to investors, QCP Capital expressed confidence that Bitcoin’s positive momentum will continue as the market enters 2025.
Markets are now looking forward to “Trump’s proposed 60% tariff on China and fiscal concerns like the rising national debt,” QCP Capital added in a follow-up note.
“We expect BTC to carry less risk premium compared to equities, potentially positioning it to outperform other risk-on assets.”
Meanwhile, the Coinbase Premium Index, a metric that tracks the Bitcoin price difference between Coinbase and Binance, spiked to 0.098 on Nov. 6, its highest since April 14.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
Reacting to this metric, crypto community Cobak said that “this signals rising US demand for Bitcoin, boosted by major inflows into spot ETFs from giants like BlackRock.”
The index suggests that Bitcoin’s bullish momentum may continue and lead to a sustained market rally.
“All eyes are now on how Trump’s crypto stance might shape the market!”
Meanwhile, US-based sport Bitcoin ETFs continued to see giant inflows with more than $1.38 billion being poured into these investment products on Nov. 7, as per data from SoSoValue.
Of these, $1.1 billion in inflows went into BlackRock’s spot Bitcoin ETF (IBIT) whose flows flipped positive reclaiming inflow status after two consecutive days of outflows totaling $113.3 million. This is the biggest inflow since January.
Total spot Bitcoin ETF flows. Source: SoSoValue
Now, market participants expect more significant inflows in the days to come, accompanied by Bitcoin price growth, as the market prepares for a new crypto era under Trump’s presidency.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
