October 8 Daily Crypto and Macro Update: Massive Stablecoin Supply Supports Crypto Prices

Globally, the most impactful news is the rising of the debt ceiling, which many economists say is just delaying a problem, but it does mean no government shutdowns for now. In the meantime, rates continue to rise, weighing on risk assets.

The risk asset that should enjoy all this is BTC, which is programmatically scarce and decentralized. Those considerations are valid. But with BTC, the optimism is tainted with insecurities. We’re bullish but are we bullish enough to buy here and push towards the 60K mark? We could go to 100K, but not too long ago, we wondered if we’d go back to 20K. 

On a short-term basis, BTC is pulling back slightly from $55,000 to now $53,700. This is, of course, still a great level to be at.

A piece of data I’m looking at right now is the stablecoin supply which is hitting new all-time highs, topping 125 billion. In case that number means nothing to you, it’s a whole lot of dry-powder, a whole lot of capital, of fiat-equivalent, ready to be poured into various crypto assets.

Does it mean we’re not at risk of a pull-back? Absolutely not, but if fundamentals remain positive and the buying interest remains, we know there’s enough to get us further up. 

It was also great to pick up on a comment by BitGo execs, managing one of the largest custodians out there, saying that they have weekly conversations with corporates asking to add bitcoin to their balance sheet. So the desire to protect value against the depreciation of cash with crypto is something more companies are looking at.

And it’s not just companies. The Nigerian central bank is apparently set to launch its own digital currencies as soon as maybe just a week or two. This could be massive for blockchain.

In the meantime, it’s also interesting to see alts outperforming BTC. You can see coins like LUNA, DOT, ADA, COMP, and STX in the green by 8% to 2%, so definitely better than BTC, down 3%. This is comforting and also highlights the cyclical nature of markets (i.e., BTC leads then takes a breather, alts ramp up, then BTC can move up again, and so on).