According to the latest data from Glassnode, an on-chain analytics company, the two largest cryptocurrencies by market capitalization, have driven the most capital inflows in the crypto market. Recent market events have triggered a significant trail of inflows for Bitcoin and Ethereum.
Data shows that Bitcoin has contributed the highest capital flow in the crypto market. The graph below reveals that the thirty-day net change in net inflows for Bitcoin is estimated to be around $4.47 billion and for Ethereum, the average could be as high as $3.5 billion. Contrary to these two cryptocurrencies, the metric value for stablecoins is negative. source: Glassnode
Notably, while these cryptocurrencies have driven greater inflows, stablecoins have tried to compensate by pushing negative value. The thirty-day net change in net inflows for stablecoins is estimated at -$1.2 billion, indicating significant redemptions are taking place within the stablecoin sector.
Simultaneously, another data set from Glassnode, specifically around the aggregate supply of stablecoins for the year shows a significant decline. As per the data, the net value of stablecoin supply held on exchanges at the start of this year was around $134 billion. Over the course of several months, its value fell to $124 billion, marking a decline of more than $10 billion on June 5.
Talking one by one about the performance of major stablecoins over the past few months, we observe that BUSD and USDC have driven this data while USDT has tried to offset the impact, recording a $17 billion surge. On the other hand, USDC and BUSD have recorded a decline in value of $15.7 billion and $11.5 billion respectively. Source: Glassnode
The recent figures also add to previous figures stating that Bitcoin and Ethereum inflow rates have surpassed stablecoins. The data shows that recently in the case of Bitcoin, there has been a clear break from the significant buy-side pressure seen in the first quarter of this year.
Notably, the recent shift in investor sentiment towards Bitcoin is thought to stem from regulatory crackdowns in the United States. The Securities and Exchange Commission (SEC) has filed charges against two major crypto exchanges namely Coinbase and Binance.US within two days.
Furthermore, as the SEC filed an emergency motion to freeze Binance.US assets, this is expected to cause panic among investors. It is also anticipated that increasing regulatory pressure in the US has led to an 11% year-over-year decline since June 2022, indicating reduced confidence in Bitcoin's resilience among American traders.
Simultaneously, the same movement has prompted traders to seek refuge in stablecoins, considering them a safer alternative. Additionally, the threat of sanctions and compliance crackdowns have driven a shift toward more conservative investments, even at the expense of potentially higher yield opportunities.
