Recent on-chain data shows a substantial increase in the total supply of stablecoins, which has coincided with a significant rally in the price of Bitcoin (BTC).
This growth in the stablecoin supply has closely followed the prolonged surge in the broader cryptocurrency market, which began after a false report on October 16 falsely claimed that a spot Bitcoin exchange-traded fund (ETF) had been approved in the United States.
During this same period, on-chain data has revealed a substantial uptick in the supply of stablecoins, with a significant portion of these being minted in the form of Tether (USDT).
According to on-chain analytics firm Glassnode, this surge in the total stablecoin supply serves as a robust indicator of net capital inflow into the cryptocurrency market.
Glassnode, in its latest “The Week On-chain” report, emphasized that stablecoins typically reflect investors’ demand for speculative capital.
The data also indicated a breakthrough above Glassnode’s Altseason Indicator, signifying upward trends in three key assets: Bitcoin (BTC), Ethereum (ETH), and the combined stablecoin market.
According to the report, Bitcoin has been leading in net capital inflow, while stablecoins had been experiencing net outflows until recently. However, the current situation shows that both Bitcoin, Ethereum, and stablecoins are all in positive territory, indicating overall increases when measured in US dollars. This trend reflects the growing interest in cryptocurrencies among investors.