Mati Greenspan, the founder of Quantam Economics, suggests that there is approximately $6 billion worth of funds ready to be splashed into the crypto market. According to the seasoned investment specialist and crypto analyst, these funds are currently held in the form of stablecoins awaiting the opportune moment for deployment.
Nearly $6 billion worth of stable coins ready to move into bitcoin and the alts at a moments notice. pic.twitter.com/ISvWMSZ5DQ
— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) January 30, 2020
In this tweet, Greenspan references data from Messari, a crypto research firm, which shows that the value of funds held in stablecoins has been growing steadily over time. Currently, the total value is just shy of $6billion with Tether making up for much of the total.
According to Messari’s Stablecoin Index, over $4.78 billion is held in Bitfinex-affiliated Tether (USDT) with Circle’s USDC a distant second with $454 million while PAX comes in third with $210 million. The difference is made up by a number of other stablecoins currently trading in the crypto market such as TrueUSD, DAI, Gemini, BitUSD, and sUSD.
The ballooning value held in stablecoins has been growing steadily over the years as they have become a more reliable tool for hedging against the crypto market. Traders usually convert their fiat to stablecoins to enable them trade and move funds around more easily in the crypto market. The traders also oftentimes liquidate their crypto holdings into stablecoins if they are unsure of the market’s direction. This enables them to maintain their investment in the digital form rather than converting back to fiat. It also allows them to remain perfectly positioned to jump into the market once the conditions become favourable again.
Therefore, Greenspan follows this logic in his assertion that soon the $6billion held in stablecoins is poised to enter into the crypto markets. He theorises that the amounts held in stablecoins is a representation of traders that have existed their positions in various cryptos such as BTC, ETH, LTC, and XRP among others. Accordingly, they opt to keep their funds in stable coins waiting for signals and the optimal time to re-enter the market. So given that the dominant use of the usually dollar-pegged stablecoins is hedging, then the crypto market could be in for a bull run once these funds are channelled to buying the major cryptos.
These sentiments have found agreement from one Twitter-based crypto analyst (@CL207) who asserts that movement of such funds would give an extra push to whatever bullish momentum that the crypto market is experiencing.
Accordingly, the increased demand from within the market would have a ripple effect as outsiders and retail investors rush to invest due to Fear of missing out (FOMO). This could ultimately push the prices further up potentially surpassing the previously set highest prices.
Bitcoin is in the stealth phase of its bull run. Usually public interest do not pick up until the previous all-time high has been smashed. pic.twitter.com/cFYogWFgXe
— CL (@CL207) June 25, 2019
Image courtesy of Pixabay