Chart of the Day
Stablecoins on the rise. A major use case for dollar-pegged stablecoins is to serve as a proxy to fiat on crypto exchanges, thanks to their low price volatility. The stablecoin supply ratio (SSR) quantifies the buying power of stablecoins and their potential to move the price of Bitcoin. A low SSR signals a greater potential to push the price of Bitcoin higher.
Considering the parabolic growth of the total stablecoin supply, the SSR is likely to continue its downward trend. With the U.S. Senate approving the $1.9 trillion stimulus package and stablecoins playing an increasingly important role in value transfer, their incremental growth could be expected in the months to come and could, in turn, drive up demand for cryptocurrencies across the board — in derivatives trading and DeFi applications.
Talk of the Town
Better together? U.S. lawmakers introduced legislation on Tuesday to join hands with the SEC and CFTC in creating a working group to evaluate the existing legal and regulatory framework governing digital assets. The move formally brings together two major financial watchdogs to navigate key legal issues that have clouded the industry for years. Their collaboration is expected to bring greater regulatory clarity to the crypto space.