This is because stablecoins deposited on exchanges effectively represent demand for cryptocurrency (most often Bitcoin or Ethereum).
“The current Stablecoin Supply Ratio (SSR) indicates a high buying power of stablecoins over #Bitcoin – and therefore an increased potential for an upwards movement of $BTC. SSR is 3x stronger than it was when $BTC hit these price levels over a year ago.”
Adding to this, the number of Bitcoin held on exchanges has decreased massively over recent months. This is in response to a number of factors, but an increase in fiat supply (demand) and a decrease in BTC supply should lead to higher prices in the coming months and years.
It isn’t clear how much of an effect these on-chain trends will have on price action, though.
Set to boost Bitcoin further is the impending Jackson Hole symposium for central banks. This symposium will be digital, of course, but the effects of the decisions/discussions at the event are expected to be as influential as ever.
The market is seemingly pricing in the expectation that Jerome Powell and other central bankers will target higher levels of inflation.
Inflation will boost all asset prices. Bitcoin and gold, especially, stand to benefit from this as they are both seen as hedges against inflation and hedges against fiat systemic risk.
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