A Glimpse of Smart Money's Stablecoin Holdings: What's the Trend?

Compilation of the original text: Deep Tide TechFlow

Compilation of the original text: Deep Tide TechFlow

Remember one of the most basic golden rules of investing:"follow the money"。

Stablecoins are the lifeblood of cryptocurrencies. Let's see, where do these lifebloods go?

TL;DR:

Most recently, November saw the highest ever on-chain transaction volume, stablecoin outflows from exchanges, and smart money continued to maintain high holdings of stablecoins, but their holdings of popular stablecoins USDT, USDC, and BUSD all declined.

First, let’s take a look: Stablecoin flows on exchanges.

We can see that since November 4th, the balance of stablecoins on exchanges has dropped sharply. Worth approximately $4 billion. This coincided with the FTX crash and panic. People are rushing to move their cryptocurrencies off exchanges.

Next, let's look at smart moneyHow many stablecoins are held。

The idea is:

• Long Stablecoins = Bearish

• Fewer stablecoins = bullish

We can see that the smart money’s stablecoin holdings have increased significantly year-over-year, indicating that risk appetite is currently low.

View the daily on-chain transaction volume of stablecoins:

We can see that November was the month with the highest transaction volume ever, most of which came from USDC with $585,518,197,775 on-chain

This may also be due to the panic caused by FTX.

Next, we look at the most famousHistorical token holdings for 4 stablecoins: $USDT, $USDC, $BUSD, and $DAI

Let's see what the smart money prefers and what they hold:

The amount of $USDT held by the smart money has been slowly draining since September.

The USDC held by the smart money has been gradually increasing until September, and has been declining since then.

Next, let's look atBinance’s Rising Star $BUSD, we can see that it had a huge surge in early November, which has now retraced sharply.

Finally, we can see that since the summer, the amount of $DAI held by smart money is gradually increasing,Although it's still below where it was at the start of the bear market.

In conclusion, analyzing the flow of stablecoins can be very helpful in identifying and staying on the right side of market trends if you are trying to find and follow trends.

You might want to think about market risk when the smart money is holding large amounts of stablecoins, and you might want to think about doing the same thing when they move out of stablecoins.

A decrease in stablecoin holdings is generally considered bullish, however given the current environment in the cryptocurrency space (FTX), it can be inferred that fear and uncertainty have contributed to the current decline in stablecoin holdings.