This is a year of surprises and unexpected events, but the predictability factor will hopefully be back once the US elections are over and done with, at least for a short while.
Indeed, we’re on the cusp of seeing an amplified version of the events witnessed after the 2008 financial crash, or at least that’s what various data suggests.
let’s dig in.On-Chain bitcoin data indicates a macro move is close
Several on-chain metrics are pointing towards an imminent macro move in bitcoin’s price. The last time such a major discrepancy was observed in the SSR ratio (Stablecoin supply ratio) was this time two years ago in 2018, just before the plunge from $6,000 to $3,470.
The ratio measures the ratio between the injection of capital in bitcoin and the capital flowing into stablecoins. A low SSR indicates higher ‘buying power’, which increases the potential for big capital inflows into bitcoin.
By comparison, stablecoins had far less purchasing power at the time, and the amount of stablecoin cash sitting on the sidelines today is completely inverted to favour relatively massive purchasing power. One reason for the discrepancy is probably DeFi, which one can participate in without ever purchasing bitcoin.
Of course, DeFi is an incredibly young sub-sector and capital destruction is an everyday occurrence, but investors don’t seem too bothered about trading unregistered securities on seize-able DEX’s provided they can flip altcoins into stablecoins more or less instantly.
Currently, the stablecoin supply is multiplying like never before, having reached a whopping $20 billion plus in total value. Just in August, Tether (USDT) alone held $13 billion of the whole stablecoin market; it now holds close to $16 billion.
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