Stablecoin Marketcap

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about the stablecoin market more Specifically we're going to look at the Total market cap of the top four and the Interactions of the total market cap Between all four of them if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up and also check out the sale on into The cryptographers premium at into the links in the description Below let's go ahead and jump in now we Don't really often talk about the Stablecoin market we we have put out a Couple videos recently on things like The stablecoin supply ratio that gives You an idea of the purchasing power of The stablecoin market in terms of its Ability to move Bitcoin higher but in This video I want to specifically talk About the stablecoin market cap Um you know for the top four by Mar you Know by market cap now I want to start Off by saying in no way do I endorse a Single stable coin okay in fact it was Over a year ago that I said I'm getting Out of the stablecoin market because While I don't wish to see them go down Own I also don't want to bet any of my Own money on them now at the time that Might have seemed silly but after the Collapse of UST and and after the recent Temporary de-pegging of both usdc and

Dye I hope people can understand why I Took this fairly risk-averse strategy so While we are talking about the Stablecoin market in this video I just Want people to know that all of all of My spare money is actually just in USD Not within the cryptoverse just because I want to wait to see how the stablecoin Market evolves here over the next Several months and to see which ones can Ultimately survive whatever potential Regulation is coming Um now with that said we're going to be Investigating the top four by market cap And that includes usdt tether at number Three with a market cap of 80 billion Usdc with a market cap of 32 billion And we also have busd here at number 12 With a market cap of 7 billion and then Finally we have die with a market cap of 5 billion so clearly Um clearly tether and usdc make up by Far the majority of the stablecoin Market and so what we're going to do is Sort of look at what the total market Cap of these stable coins are is doing And that way maybe it would actually Make more sense to or it might it might Help people better understand the stable Coin Supply ratio metric that we talked About not too long ago if you look at The market cap of usdc you can actually See that it's come down quite a bit from The peak that it hit back in the summer

Of 2022 in fact the market cap of usdc Since then is down about 41 to 42 Percent now some might argue that the Market cap has gone down because people Are are quote unquote buying the dip Although you could also argue that it's Going down at least recently due to the Recent fears in the temporary debegging Of usdc now of course right now it is a These found its Peg but I I think that You can see that some investor Confidence was Shake I mean none of this Is financial advice by the way but if You look at say the the usdc USD chart You'll notice that it was actually it Actually depegged here very briefly and Then came back up but if you look at the Date of this this occurred on March 10th Now look at the market cap of usdc Starting March 10th if we sort of zoom In here okay this is when it really Started to to to Fall Like a Rock Drop Like a Rock right and the market cap of Usdc fell from 43 billion currently Sitting at 32 billion and there's not Any clear indication that it's done Dropping so the market cap of usdc has Continued to go down okay now again an Optimist might look at that and say well That means people are buying the dip a Pessimist would probably look at it and Say well if if the stablecoin market was Going up during a bull market then at What point would something like this be

Seen in a different light Um the other one that I want to look at Though is usdt which tells a different Story if you look at usdt market cap You'll see that it yes it fell off in May of 2022 uh you know just before the Summer of 2022 but recently it's Actually started going back up Right so Could we argue that usdc is is being Used to to quote unquote buy the dip or Is usdt to some degree been absorbing Some of that market cap if you take a Look at usdc's market cap plus usdt what Do you notice it's been going sideways Essentially since late 2022 So I think the appropriate conclusion That I would come to is that there's Been a significant amount of usdc Arguably converted to other things like Usdt Um and and and and probably some Bitcoin Some other cryptocurrencies as well There has been at least to some degree a Flight out of Usdc and into other stable coins and Potentially into other cryptocurrencies As well now another interesting thing to Look at is the market cap of busd now I Believe they're no longer issuing this And it it would make sense to see that It's dropping quite quickly right so the Market cap of busd which was at around 23 billion not that long ago has now

Fallen about 69 percent to again only 7 Billion and then finally if we take a Look at the market cap of die you'll see That it's also been dropping really Since 2020 uh since February of 2022. so The question that this raises right is Any individual stable coin is going to Be somewhat noisy because you don't know If the market cap of that stable coin is Going down because it's going into into Say Bitcoin or ethereum or the altcoin Market or if it's going into the stable Coin Market or you know other stable Coins we don't really know but one thing We can do is we can take usdc's market Cap plus usdt plus die and then plus Busd and what happens if you add all Four of them together You get a pretty compelling Trend right And what is that Trend well since May of 2022 the trend in terms of the market Cap of stable coins has just simply been Down right and again it started the Market cap over here was only about 5 Billion right and and during the bull Market it went to all the way up to Around 151 billion now since its height The stablecoin market cap at least Consisting of the top four which Arguably captures a majority of it and Most everything else would likely be Negligible in terms of its effect on the Total market cap the stable coin Market The total market cap is down about 22 to

23 percent over the last year okay now I've tried to you know I struggle Honestly to try to understand what Exactly this means because again The Optimist would say well that means People are are putting their stable Coins in into you know into other Cryptocurrencies right like Bitcoin and Ethereum Etc but a pessimist would say Well The stablecoin market cap has been going Down since you know since May right and And there's been plenty of lower lows And in a lot of different Cryptocurrencies since then including Bitcoin right Bitcoin had a low in in June it also had another low in November All while the stable coin Market was Going down so I don't really know that That's the best case Um to be made but I I would argue that It it shows some level of of outflows From the cryptoverse as unfortunate as It is and you know I I do think that After we get some regulation and or at Least regulatory Clarity then I I think You'll see more flows come back into the Cryptoverse and you'll likely see uh Some of these things go back up but Until there's more clarity on on what it Is these things even are until we know Um you know until investors are more Confident I think the more likely trend For the stable coin Market is in fact

Down in terms of the total market Capitalization and again I mean you know If if you were to sort of just extract Extrapolate this Trend it would only Take until say November for the market Cap to get down to about a hundred Billion or so and this is you know at The at the pace that it's currently Falling off right if you were to sort of Draw the trend line and extrapolate it Out although extrapolating is somewhat Dangerous Um you can see that that it would sort Of hit that 100 billion Mark by the end Of the year now one thing That I think is is also worthwhile to Consider is in terms of we've talked a Lot about you know the stable coin Supply ratio and the Bitcoin dominance Now one one thing about the dominance is That a lot of people have said well the Dominance is never going to for Bitcoin Is never going to go back up to its its Prior levels of say 70 to 75 percent Because of the stable coin market and Honestly I would tend to agree with that I don't really necessarily think the Dominus is going to go back to 75 but I Could see it going back to 60 percent And one of the reasons of course is Because if you think of the state of a Coin Market it's it's currently acting I Believe as a Tailwind for Bitcoin Dominance because if the stable coin

Market cap is going down and and we've Seen the Bitcoin dominance going up one Reason that the dominance might go up at Some point is not just because the Altcoin market is bleeding back to Bitcoin but also because the the stable Coin Market is Simply Having a a less And less effect right the market cap of Stable coins is going down and therefore Sort of taking away some of that some of That market share or some of the markets Share that the stablecoin market had has Been taken away and if this trend Continues and I I imagine it's only Going to continue that Trend but when You think about the stable coin Market One of the things we've talked about is The stable coin Supply ratio and the Reason why I like that metric Is because it generally shows the sort Of the ability of the stablecoin market To sort of support the price of Bitcoin To a higher level and and this metric Doesn't really go back that far but you Can see there's been three times when we Got above the the Bollinger band over Here so if you if you just look at the Stable coin Supply ratio it's this Orange line right here if you look at it In the context of its Bollinger Bands it Looks like this this is the third time It's really been Above This level so in The the first time was back in May of 2019 so it first got above it in May of

2019 and when it first got above it in May of 2019 you'll note that Bitcoin Continued to go higher but upon the next Level up the stablecoin market could Really no longer support the price of Bitcoin at you know at too much higher Valuations than 14k back then and Therefore you know you can see that it Slowly came back down a similar thing Occurred back in in 2020 and early 2021 You can see that we went above the Bollinger Bands and once we got above it In Lay late December Um you know the the price of Bitcoin Stabilized a little bit and then it Actually went into this distribution Phase and I'm sure many of us uh are are Very familiar with and then we Eventually you know sort of came back Down to earth and then we find ourselves In a similar predicament again where you Know we're sort of flirting with that Upper Bollinger band meaning the the Stable coin market cap is having it's Not to say that Bitcoin USD can't go up But it's to say that the stable coin Market is having it's going to be harder And harder for the stablecoin market Alone to to support uh the current Prices just because the stablecoin Market cap has been going down Um very very quickly there's not really A lot of new flows in the stablecoin Market and so that's why we continue to

Spend you know a significant amount of Time up here and we first got back above This back in in January and really since Then we've been you know just above it For most of it most of the time we have Gone below it uh just a little bit we Are getting pretty close to getting back Below it uh but we're not quite there Yet the the way that this could go down With without Bitcoin USD going down Would be for there to be a lot more Inflows into the stablecoin market but As we said before you know this this Trend here at least so far seems like It's down so until something changes I Don't really think that we should assume That a different outcome is going to Um that a different outcome is going to Occur and if you look at the sort of the Stable coin Supply ratio oscillator it Looks something like this note that this Level here is the same level that we Came to in 2019 note that when we got to This level in 2019 it actually did not Mark the top we had one more one more Move higher note that this one also did Not Mark the top because when we hit This one I believe at like 27 or 28k and At least so far we've gone to 29k still Sort of pending on on if that's the Finale of it or if it will or if it will Continue on higher the the last thing That I wanted to mention is how how the Deterioration of the stablecoin market

Cap acts as a Tailwind for the Bitcoin Down dominance and I wanted to sort of Show that if you look at the Bitcoin Dominance comparison this is what it Looks like and you'll notice that the Yellow sort of the yellowish green line Here is the stable coin Market Um so so you have two different ones Here right so this one is without stable Coins the one on top the green yellow One and then this orange one is with uh With stable coins so you have with Stable coins and without stable coins And what you'll notice is that the Without stable coins is actually Catching up meaning that it's going up Quicker than the dominance including Stable coins and the way to visualize This is to add a formula here we're Going to say take M3 minus M2 so M3 as You can see is Bitcoin dominance what Else do the coins M2 is with stable Coins if you evaluate that switch it Over to a linear scale you can see and Let me just hide everything else so that It's a bit more clear You can see that the Delta between the Dominance including and excluding stable Coins is actually going down at one Point it was all the way up near ten Percent now it's it's below six percent And continuing to fall which arguably is Still another Tailwind for the Bitcoin Dominance to go higher

Um you know assuming this trend Continues so I just wanted to provide This sort of this insight into the Stablecoin market Um you know there have been some Outflows here and we've seen the market Cap of usdc go down we've seen the Market cap of B USD go down and die go Down usdt has been going down as well Recently it popped back up though I Think part of that though is likely the Conversion or people some people moving From usdc To USD just because the recent debegging Of usdc but again I do not endorse any Of them and I I prefer to just sit in USD at the current time and and finally Just remember I'll just leave you with The with the chart that we had earlier If you if you overlay all of them You can see a pretty clear downtrend in The stable coin market cap which is is Isn't certainly an interesting Trend uh That I've been following here for a Little while I don't really think it's Going to turn back up until you see some Type of regulatory Clarity Um to give you know to give investors Some more confidence in in the Stablecoin market or if there's if there Is no more uh if if that doesn't come For a while then I imagine that this Stablecoin market cap will just continue To go down and the difficult part about

That again is that as the stablecoin Market cap goes down it becomes sort of A a headwind for for you know non-stable Coins to continue to go up uh because The purchasing power of the stablecoin Market is just simply not what it was Right I mean if again in the short term It can it can prop up prices if people Convert their Stables to to say Bitcoin Or ethereum but Um if you know if this doesn't go back Up at some point then that purchasing Power slowly diminishes over time but Again if you guys like the content make Sure you subscribe to the channel give The video a thumbs up again we do have To the cryptographers premium at into make sure you check Out that sale we do have different tiers Available including a free one links in The description below I'll see you guys Next time bye


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