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How Binance’s $22 Billion Stablecoin Inflows Powered Bitcoin’s Rally
On December 14, a notable milestone was reached in the world of cryptocurrency as Bitcoin (BTC) price surged to reach $100K. Analysts have been trying to decipher the factors behind this dramatic rise, and one theory gaining traction is that it has been powered by Binance’s massive inflows of stablecoins.
The theory suggests that these large-scale inflows have boosted liquidity in the market, subsequently driving prices higher across the crypto space. For those unfamiliar, stablecoins are digital currencies pegged to the value of a fiat currency like the US dollar, and their stability is what makes them attractive for trading purposes.
Binance’s share of the global stablecoin supply has been on an upward trajectory since March 2023, with the exchange now holding at least 16.8% of the total market cap of stablecoins. For context, in the same period, OKX, another prominent crypto exchange, saw its netflow of stablecoins shrink to $1.6 billion.
The stark difference in these numbers is a testament to Binance’s rapid growth as a reliable and attractive platform for users seeking liquidity in the global cryptocurrency market. This phenomenon has significant implications on the trajectory of Bitcoin prices and other cryptocurrencies.
Source: coinpedia.org
