Stablecoin Growth Is Slowing Down—What It Means For Bitcoin

As displayed in the above graph, the stablecoins have been seeing their combined market cap going up for a while now, suggesting these fiat-tied tokens have been getting capital injections.

Compared to the last couple of months of 2024, however, the metrics growth rate has today severely declined. The percentage change in the indicator still continues to be positive, but it has come quite close to dipping into the negative region.

The analytics firm explains,

As stablecoins serve as core quote assets across crypto markets, this slowdown adds further evidence of a broad contraction in digital asset liquidity and a more risk-off environment.

From the chart, its apparent that a reversal to the downside meant a bear market in full swing for Bitcoin back in 2022. The trend in the stablecoin market cap could thus be to keep an eye on in the near future, to see if a similar reversal would take place for the metric this time as well.

In some other news, the Bitcoin Coinbase Premium Gap has been making some recovery recently, as an analyst has pointed out in a CryptoQuant Quicktake post.

The trend in the BTC Coinbase Premium Gap over the last couple of years | Source: CryptoQuant

The “Coinbase Premium Gap” keeps track of the difference between the Bitcoin price listed on Coinbase (USD pair) and that on Binance (USDT pair). The metric is currently negative, implying Coinbase users are potentially applying selling pressure relative to the Binance users, but its value has slowly been rising, which can potentially be a positive sign for the asset.

BTC Price

At the time of writing, Bitcoin is trading around $85,300, up over 7% in the last week.