Bitcoin’s Exchange Stablecoins Ratio across all exchanges is currently around 0.0000465. It's very close to its one year high of 0.000047. This is also about 37% higher than its late April low of roughly 0.000034. The ratio basically compares how much BTC exchanges hold against their stablecoin reserves. When it rises, it means there is less stablecoin liquidity available relative to the amount of BTC sitting on exchanges.
What I find interesting is what is actually causing this increase. BTC reserves are currently around 2.68M BTC which is almost the same as in late April (2.675M) and about 58K BTC lower than in late September. So the increase in the ratio isn't really coming from the BTC side. It's mainly because stablecoin reserves have been falling. USDT (ERC-20) reserves for example, are now around 47.3B which is their lowest level in a year compared to roughly 57.5B in mid May. The decline has also been fairly consistent since then.
In other words, exchanges now hold roughly the same amount of BTC as they did during the April-May rebound, but there is significantly less stablecoin liquidity available to buy it. Back then, the ratio was near its lowest levels.
Of course, the ratio alone does not tell us where those stablecoins have gone. Some may have been used to buy BTC, which was then withdrawn from exchanges. That would also be consistent with the recent decline in BTC reserves. But they could just as easily have moved to other exchanges, networks, or been used for something else. It is also worth mentioning that the USDT (ERC-20) data doesn't include USDT on other networks or other stablecoins.
Going forward, I would watch whether the ratio falls back below 0.000044, which could suggest stablecoin balances are starting to recover. On the other hand, a move above 0.000047 would mean the gap is widening further.
For now, both BTC reserves and stablecoin liquidity on exchanges are declining, but stablecoin reserves are falling faster.
What I find interesting is what is actually causing this increase. BTC reserves are currently around 2.68M BTC which is almost the same as in late April (2.675M) and about 58K BTC lower than in late September. So the increase in the ratio isn't really coming from the BTC side. It's mainly because stablecoin reserves have been falling. USDT (ERC-20) reserves for example, are now around 47.3B which is their lowest level in a year compared to roughly 57.5B in mid May. The decline has also been fairly consistent since then.
In other words, exchanges now hold roughly the same amount of BTC as they did during the April-May rebound, but there is significantly less stablecoin liquidity available to buy it. Back then, the ratio was near its lowest levels.
Of course, the ratio alone does not tell us where those stablecoins have gone. Some may have been used to buy BTC, which was then withdrawn from exchanges. That would also be consistent with the recent decline in BTC reserves. But they could just as easily have moved to other exchanges, networks, or been used for something else. It is also worth mentioning that the USDT (ERC-20) data doesn't include USDT on other networks or other stablecoins.
Going forward, I would watch whether the ratio falls back below 0.000044, which could suggest stablecoin balances are starting to recover. On the other hand, a move above 0.000047 would mean the gap is widening further.
For now, both BTC reserves and stablecoin liquidity on exchanges are declining, but stablecoin reserves are falling faster.
