{"id":130899,"date":"2020-04-18T14:00:36","date_gmt":"2020-04-18T13:00:36","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=130899"},"modified":"2020-04-25T09:27:44","modified_gmt":"2020-04-25T08:27:44","slug":"this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit\/","title":{"rendered":"This \u201cdry powder\u201d could spark the crypto market\u2019s next parabolic rally when lit"},"content":{"rendered":"<p>Crypto investors have long been looking towards different narratives to support the notion that the market is just a stone\u2019s throw away from finding itself caught within the next major parabolic uptrend \u2013 although the vast majority of these theories have been invalidated throughout the past few years.<\/p>\n<p>Despite Bitcoin\u2019s \u201csafe haven\u201d narrative showing signs of faltering, and its imminent halving event not catalyzing any notable upwards momentum, there is one fundamental development that has been occurring that is quite notable.<\/p>\n<p>The growth in the <a href=\"https:\/\/cryptoslate.com\/this-key-baseline-issue-could-undermine-public-confidence-in-crypto-stablecoins\/\">amount of stablecoins<\/a> currently sitting on exchanges may be an overlooked factor that could ultimately have a major impact on the crypto market, potentially acting as \u201cdry power\u201d that fuels the next upswing.<\/p>\n<h2><strong>Stablecoin balances on exchanges exceed $3 billion<\/strong><\/h2>\n<p>In theory, stablecoins can be used as <a href=\"https:\/\/cryptoslate.com\/after-tether-usdc-dominates-stablecoins-with-a-452-million-market-cap\/\">transactional tools<\/a> that allow users to exchange value digitally without being exposed to the volatility seen by cryptocurrencies like Bitcoin.<\/p>\n<p>It is important to note, however, that their current utility primarily stems from investors and traders who utilize them for trading purposes, anchoring their capital during times of bearishness or turbulence amongst traditional cryptocurrencies.<\/p>\n<p>Stablecoins have also garnered some popularity within the DeFi ecosystem, being used to collateralize loan positions.<\/p>\n<p>The growth in their popularity on these two fronts has led there to be over $3 billion worth of these tokens on exchanges, a significant number.<\/p>\n<p>A recent chart from blockchain data and analytics firm <a href=\"https:\/\/messari.io\/\">Messari<\/a> highlights this, showing the distribution of these funds across the top crypto exchanges.<\/p>\n<figure id=\"attachment_130900\" aria-describedby=\"caption-attachment-130900\" style=\"width: 800px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-130900 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/04\/MessariStablecoins.png\" alt=\"Crypto Stablecoins\" width=\"800\" height=\"450\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/04\/MessariStablecoins.png 800w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/04\/MessariStablecoins-300x169.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/04\/MessariStablecoins-768x432.png 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><figcaption id=\"caption-attachment-130900\" class=\"wp-caption-text\">Image Courtesy of Messari<\/figcaption><\/figure>\n<p>This number specifically references the stablecoins that are being actively held within exchange wallets and does not fully highlight the magnitude of the <a href=\"https:\/\/cryptoslate.com\/tether-plans-to-issue-two-commodity-pegged-stablecoins\/\">stablecoin ecosystem<\/a>, as many are locked within DeFi positions or held in non-exchange wallets.<\/p>\n<h2><strong>Could these tokens fuel the next crypto market uptrend?<\/strong><strong>\u00a0<\/strong><\/h2>\n<p>The growing value of these tokens sidelined on exchanges suggests that many traders exiting their crypto positions are not fully exiting the markets, but are rather just looking to hedge against Bitcoin and other cryptocurrencies seeing further downside.<\/p>\n<p>Ryan Selkis spoke about this in a <a href=\"https:\/\/twitter.com\/twobitidiot\/status\/1250979847536590849\">recent tweet<\/a>, explaining that the growth in on-exchange stablecoin balances marks the crypto economy having more \u201cdry powder\u201d than ever.<\/p>\n<blockquote><p>\u201cThere's now $3 billion+ of stablecoins sitting on exchanges. If investors wanted to cash out of crypto completely, they would have withdrawn funds to banks. Instead, we've got more dry powder held in the crypto economy than ever before. In both real and market cap % terms.\u201d<\/p><\/blockquote>\n<p>This factor does certainly give investors a reason to be optimistic, although this number will have to grow further in order for it to have a significant impact on the market, as it currently only accounts for a small fraction of the aggregated market\u2019s size.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto investors have long been looking towards different narratives to support the notion that the market is just a stone\u2019s throw away from finding itself caught within the next major parabolic uptrend \u2013 although the vast majority of these theories have been invalidated throughout the past few years. Despite Bitcoin\u2019s \u201csafe haven\u201d narrative showing signs [&hellip;]<\/p>\n","protected":false},"author":174,"featured_media":130919,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[61715,32631],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>This \u201cdry powder\u201d could spark the crypto market\u2019s next parabolic rally when lit<\/title>\n<meta name=\"description\" content=\"The growth in the amount of stablecoins on exchanges may be an overlooked factor that could ultimately have a major impact on the crypto market\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"This \u201cdry powder\u201d could spark the crypto market\u2019s next parabolic rally when lit\" \/>\n<meta property=\"og:description\" content=\"The growth in the amount of stablecoins on exchanges may be an overlooked factor that could ultimately have a major impact on the crypto market\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2020-04-18T13:00:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-04-25T08:27:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/04\/powder.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Cole Petersen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Cole Petersen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/this-dry-powder-could-spark-the-crypto-markets-next-parabolic-rally-when-lit\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#person\",\"name\":\"Cole Petersen\",\"url\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"caption\":\"Cole Petersen\"},\"jobTitle\":\"Journalist\",\"description\":\"Cole is a freelance journalist and university student studying philosophy. 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