@praxisveritas

Sometimes, reframing or inverting a problem can add clarity. Instead of drawing lines on charts or obsessing over defined length moving average cross-overs, we can look at the other end of the crypto risk asset complex: stablecoins. Major, established stablecoins are the first port of call when derisking a portfolio or moderating some of its volatility. In the most recent sell-off the share of the aggregate crypto market capitalization in stablecoins reached ~9%. The last time we saw such high prints was over 2 years ago in Oct, 2023. Furthermore, if we look at the rate of change in the stablecoin market cap share we see that the last time we rose in such a pronounced and persistent fashion was in the aftermath of the FTX collapse. The aggregate stablecoin supply outstanding continues climbing, a sign that capital isn't departing the asset class in the same way as in the last bear market. A true vote of no confidence would be the redemption of stablecoins back into the Treasuries which back them.

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