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BTC Price Likely to Surge as Bitcoin Stablecoin Supply Ratio Drops, Here’s How


u.today 02 April 2020 02:30, UTC
Reading time: ~3 m

According to data provided by the Glassnode agency, the Bitcoin stablecoin supply ratio (SSR) has hit another all-time low of 16.180.

Why low SSR is good for Bitcoin traders

Dollar-backed stablecoins are one of the major tools among traders to enter or exit Bitcoin on crypto exchanges. The purchasing power of stablecoins for Bitcoin is basically the ability of USD-backed stablecoins to buy BTC and impact its price.

In 2019, Binance reported an increase in stablecoin trading volume from 35 percent to 60 percent. The trading volume of USDT is about 6 billion USD higher than that of BTC. 

On crypto exchanges, traders use stablecoins as a fiat replacement, so the SSR can impact the Bitcoin price directly. When the stablecoin supply ratio goes down, this means that the BTC price is expected to rise.

📉 #Bitcoin $BTC Stablecoin Supply Ratio (1d MA) just reached an ATL of 16.180

Previous ATL of 16.187 was observed on 17 March 2020

View metric:https://t.co/dZX3C28SDR pic.twitter.com/KGVvg3nYV9

— glassnode alerts (@glassnodealerts) April 1, 2020

Bullish anticipations ahead of the halving

With slightly over a month left before the third Bitcoin halving, in which miners will have their rewards cut by fifty percent, more and more top crypto community members are tweeting that the Bitcoin halving, along with other factors, is likely to drive the coin’s price up within the next year or two.

Even though some miners are likely to switch their rigs off and leave the business, experts are positive that new people with mining gear will quickly take their place. Some also admit that after the halving miners may start selling some of their BTC to pay the electricity bills and cover other financial losses due to the fact that after May 2020 they will start making half as much BTC from their operations.

So many people don't understand how Moore's Law is a vital component in the game theory of #Bitcoin's price appreciation. When the speed of processing doubles every 2 years and the flow of new coins gets halved every 4 years, you get some VERY interesting results...

— Preston Pysh (@PrestonPysh) March 31, 2020

Besides, the current financial crisis that has broken out due to the COVID-19 epidemic, and the unprecedented QE measures the US Fed Reserve has initiated are leading many in the crypto community to expect that this situation, along with the halving, will soon spread Bitcoin adoption wide.

 Bitcoin developer Jimmy Song tweeted:

“My hope after this crisis is that more people recognize central bank monetary policy for the evil that it is. It's never neutral, it favors one group over another and causes huge societal problems. Once they recognize that, it's a short step to opt out with #Bitcoin.”

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