In a recent market analysis, Santiment revealed various data for some altcoins. In particular, he reported that the top five stablecoins have seen a decline in their overall market value over the past three years. Here are the details…
Santiment reveals key data for five altcoins
Market analysis firm Santiment made important statements. USDT reported a decline in the combined market value of USDC, BUSD, DAI and TUSD over the past three years. However, despite this decline, closer inspection reveals interesting information regarding the health and potential recovery of the cryptocurrency markets. The stablecoin market cap serves as an indicator of increased purchasing power for future investments in Bitcoin (BTC) and altcoins.
If stablecoins market cap rises while BTC and altcoins suffer a decline, it indicates the likelihood of the market recovering when stablecoins are reinvested. This was evident between June and August 2021, when BTC prices fell but the stablecoin market value rose. Afterwards, a significant recovery was seen in prices in September. Then, as we reported as Kriptokoin.com, all-time highs were reached in the crypto space.
Alternatively, a higher market cap for stablecoins could mean that Bitcoin and altcoins are being sold. This shows that large addresses are making significant profits. It also reveals that it is no longer supporting the markets as it did during the previous bull run. A positive trend emerges when examining stablecoin holdings from major investors, often referred to as “sharks” and “whales.” Tether (USDT) holders have accumulated more than 40 percent of the supply, the highest amount since November 2021.
Why are investors shifting their assets to stablecoins?
Similarly, holders of USD Coin (USDC) and Dai (DAI) saw their holdings reach over 37 percent and nearly 40 percent of the supply, respectively. Assets in these coins reached their highest levels since February 2023 and December 2020. These statistics indicate that notable investors have not completely exited the crypto market. But it does show that they are shifting their holdings to stablecoins while waiting for the right moments to reinvest.
As the whale transactions show, stablecoin accumulation by major investors is constantly underway. There were no notable anomalies or sudden large stablecoin movements, especially during market downturns. Such significant moves, especially during market downturns, can indicate a potential market bottom and a promising sign for a market rise. Another factor to consider is the movement of dormant stablecoins. A falling average dollar investment age of an asset indicates that older addresses are about to make a move, potentially triggering market activity and signaling large purchases of BTC or altcoins.
Although there were some encouraging movements in USD Coin at the end of May that pointed to potential market firing, there was no significant increase comparable to the stagnant stablecoin boom witnessed in mid-March. This sparked the next bullish rally. While stablecoin market values have been experiencing a recent dip, it should be noted that whales and sharks are not the cause of this drop.
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