The CEO of blockchain database startup Messari said there is a large amount of crypto capital on the sidelines, ready to move into the Bitcoin, Ethereum, XRP and larger altcoin markets.
Ryan Selkis cites new data showing cryptocurrency exchanges now hold more than $3 billion of stablecoins on behalf of their customers.
He said these investors were in a strategic position to re-enter the speculative crypto market at a moment’s notice.
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“There are now $3 billion++ stablecoins sitting on exchanges. If investors want to fully cash out crypto, they will withdraw funds to the bank. Instead, we have more dry powder stored in the crypto economy than ever before. Within the limits of real% and market capitalization. ”
Stablecoins are digital currencies that are pegged to traditional assets such as fiat. They are designed to have a stable value and offer crypto traders an easy way to escape the high volatility of the crypto market.
Back in November, Binance Research published a report on the habits of 69 high-value customers with crypto allocations ranging from $100,000 to $25 million.
The survey found that 96% of those investors use the stablecoin market, with Tether (USDT) ranking as the top stablecoin by a wide margin.
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“Despite ongoing legal issues considered one of the most significant risks to the industry, USD Tether (USDT) remains the most used stablecoin (40%), citing reasons such as greater liquidity and higher market cap than similar companies.
While alternative options are also being used, exchange-backed stablecoins, such as USDC (Coinbase, Circle) and BUSD (Binance), appear to spark more prominent interest from many respondents than competitors backed (rather than USDT). ”