Daily ‌‌Macro + Crypto Update—Massive Stablecoin Supply Supports Crypto Prices

By Justin d'Anethan | Daily Market Update | 8 Oct 2021

You can feel fear in the optimism these days, both in crypto and traditional assets. Globally, the most impactful news is the rising of the debt ceiling; for many economists that’s just delaying a problem that only grows with time, but it does mean no government shut-downs for now. In the meantime, rates continue to rise, weighing on risk assets.

The risk asset that should enjoy all this is BTC, programmatically scarce and decentralised. But there the optimism is also tainted with insecurities. We’re bullish but are we bullish enough to buy here and push towards the 60K mark? We could go to a 100K but not too long ago we were wondering if we’d go back to 20K. Those considerations are valid.

On a short-term basis, BTC is pulling back slightly from the $55,000 to now $53,700. This is of course still a great level to be at.

A piece of data I’m looking at right now is the stablecoin supply which is hitting new all-time highs, topping 125 billions. In case that number means nothing to you, it’s basically a whole lot of dry-powder, a whole lot of capital, of fiat-equivalent, ready to be poured into various crypto assets.

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Does it mean we’re not at risk of a pull-back? Absolutely not, but, if fundamentals remain positive and the buying interest remains, we know there’s enough to get us further up.

It was also great to pick-up on a comment by BitGo execs, managing one of the largest custodians out there, saying that they have regular -weekly- conversations with corporates asking to add bitcoin to their balance sheet. So the desire to protect value against the depreciation of cash with crypto is something more companies are looking at.

And it’s not just companies, the Nigerian central bank is apparently set to launch its own digital currencies as soon as maybe just a week or two. This could be massive for blockchain.

In the meantime, it’s also interesting to see alts outperforming BTC. You can see coins like LUNA, DOT, ADA, COMP or STX in the green by 8% to 2%, so definitely better than BTC down 3%. This is comforting and also highlights the cyclical nature of markets (ie. BTC leads then takes a breather, alts ramp up, then BTC can move up again, and so on).

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Justin d'Anethan

Head of Exchange Sales at EQONEX. Passionate about financial markets, long-term investments, the occasional short-term trade and disruptive technologies.

Daily Market Update

A quick market update (1-2min read). Every week day, morning in Asia, I go over major moves in macro and crypto markets, linking fundamentals to price action.