• Glassnode data suggests that investors are continuing to hold Bitcoin and Ethereum compared to stablecoins in spite of the current risk-off environment.
• The data indicates that BTC and ETH purchasing power is on the up, as billions of stablecoins have been redeemed for fiat in recent months.
• This could be due to the FUD surrounding the Binance insolvency, which sparked a run on the exchange, but as the FUD died down, BTC and ETH buying power is increasing relative to stablecoins.
In recent months, trillions of dollars have been withdrawn from exchanges in the form of stablecoins, potentially due to the FUD surrounding the Binance insolvency. However, despite the current risk-off environment, data from Glassnode indicates that investors are continuing to hold Bitcoin and Ethereum compared to stablecoins.
The data, which was analyzed by CryptoSlate, shows that the 30-day change in stablecoin buying power on exchanges has been increasing, suggesting that there is greater stablecoin-denominated buying power in proportion to BTC and ETH buying power. This suggests that investors are confident holding Bitcoin and Ethereum, over stablecoins, during the current risk-off environment.
Stablecoins fulfill multiple functions, including facilitating on/off ramping and as a store of value, particularly in Southern Hemisphere countries that typically experience high inflation. This could explain why there has been an increase in stablecoin-denominated buying power, as investors look to protect their assets from the potential volatility of the market.
Overall, the data from Glassnode suggests that investors are still confident in the long-term potential of Bitcoin and Ethereum, compared to stablecoins, despite the current risk-off environment. This could be a sign of investors’ faith in the future of cryptocurrencies, even in times of uncertainty.