The eToro Senior Market analyst and portfolio manager Mati Greenspan is out with a fresh market prediction. Specifically, Greenspan argues that billions of dollars are currently waiting to enter the crypto markets.
Uncertain traders could be “waiting” in stablecoins
This observation came in a recent tweet from Greenspan. In it, he argues that the cryptocurrency markets could soon receive a significant investment boost. Moreover, Greenspan’s reasoning centers on the role of stablecoins in the crypto markets.
Stablecoins are essentially cryptocurrencies with a value that ties to another asset or group of assets. This could be either a basket of other cryptos, a fiat currency (such as Tether which pegs its value to the US dollar), rare metals or other resources (such as Venezuela’s controversial Petro, which supposedly ties its value to Venezuela’s oil resources.
As such, stablecoins are considerably less volatile than “pure” cryptocurrencies. According to Greenspan, this attracts traders unsure over cryptocurrencies’ short-term price performance.
Consequently, Greenspan suggests, traders who exit their Bitcoin, Ethereum, Ripple or other altcoin positions could be waiting in the stablecoin markets.
Roughly $6 billion could enter crypto markets at “moments notice”
Greenspan is using data from the cryptocurrency research company Messari to determine that a whopping $6,000,000,000 hangs in the balance: “Nearly $6 billion worth of stable coins ready to move into Bitcoin and the alts at a moments notice,” Greenspan wrote on Twitter.
This is not the first suggestion that the stablecoin market could be important to crypto investors. Back in November of 2019, a Binance Research report found that 96% of crypto investor respondents use the stablecoin market. Furthermore, this report found that Tether was the most popular stablecoin.
“USDT is the dominant stablecoin with 40.25% usage, holding the top ranking for both Chinese and English survey respondents. USDC, TUSD, PAX are following close behind USDT, and several English survey respondents wrote in BUSD under ‘Others’, reflecting an initial interest by our institutional & VIP clients […]”
It is unclear exactly what development would convince these investors to invest in the crypto markets. Perhaps traders are simply waiting to confirm a bullish trend in the market – something which could now be happening.
No matter what, the outlook that $6 billion could pour into the crypto markets at moments notice is profound. At the time of writing, the total crypto market capitalization sits at $259 billion. This means that traders shifting their holdings from stablecoins to other cryptos could significantly move the market dial.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.