Crypto liquidity inflows slow down as the stablecoin market cap remains relatively unchanged

Liquidity inflow in the crypto ecosystem has slowed down significantly since the year began. Data from Glassnode shows that the stablecoin market capitalization sits at around $189.1 billion with a 30-day net change of less than 1%.

Global crypto liquidity has slowed down as a result of the ongoing uncertainty in the crypto industry that has reigned supreme since the year started. The new year has given crypto a difficult start as market uncertainty looms ahead of Trump’s inauguration on January 20th. Macroeconomic factors such as the Fed promising to adopt a hawkish stance moving forward have fueled the uncertainty and catalyzed a short-term selloff in the industry.

Glassnode data shows stablecoin market cap has been neutral since the year began

As of Jan 13, 2025, the #stablecoin market cap stands at $189.1B, with a 30-day net change of just +0.56%. Liquidity inflows have slowed significantly, indicating a stabilization in market momentum and speculative demand: https://t.co/MgmHcYW3la pic.twitter.com/kpHVbf0lzJ

— glassnode (@glassnode) January 14, 2025

Data from Blockchain analytics platform Glassnode shows that as of January 13th, the stablecoin market capitalization sits at around $189.1 billion and has largely remained unchanged in the last month. The stablecoin sector has witnessed a 30-day net change of only +0.56%, which is a tell-tale sign that market momentum is stabilizing.

The blockchain data provider reported that the stablecoin supply rose by $27.35 billion from $161.47 billion to $188.82 billion between November 4th and December 17th last year, representing a 16.9% increase. Bitcoin climbed to a new all-time high of $106.1k from $67.8k during this period, marking a 10.67% 30-day net rise at its all-time high price then.

The report highlighted that the numbers were relatively lagging compared to those recorded early last year. Glassnode reported that between January and March 2024, the crypto rally saw BTC surge by more than 74% from $38.8K to $69.5k. 

At the same time, the stablecoin supply surged by 11.5% from $127.89 billion to $142.57 billion in the same timeframe. According to Glassnode, the bullish run witnessed from November to December required stablecoin inflows worth $27.35 billion, which is about 200% from the $14.68 billion needed during the January to March bull run last year.

Despite the difficult start this year, most long-term investors believe the industry will make a quick comeback with a bull run this year. Perhaps the most notable economic and political event that could stir things up for crypto investors is the inauguration of President-elect Donald Trump, which is scheduled for January 20th.

Investment analyst and Research Lead at CoinMarketCap Alice Liu predicted that the crypto market would pump after Trump assumed office after the inauguration event. 

Bitcoin recently slid above the $95k mark and is currently exchanging hands for $96,341 at the time of this writing. The digital asset has surged by 4.54% in the last 24 hours, reducing its seven-day decline to 1.48%. 

Macroeconomic indicators signal a looming rise in inflation

From a macro perspective, investors remain wary that the Federal Reserve Bank might retain the current rates in the next Federal Open Market Committee (FOMC). In the last FOMC meeting, Federal Chair Jerome Powel expressed the uncertainty in the U.S. economy moving forward. 

The FOMC minutes revealed that the committee members were cautious of rising inflation, prompting the need to slow down interest rate cuts after a rate-cutting spree towards the end of last year.

Data from Coinglass shows that a total of 310 million was liquidated in the cryptocurrency market in the last 24 hours. The data also shows that the largest single liquidation was worth $24.95 million and happened on the Binance exchange on ETHUSDC. 

Ethereum is down 8% in the last seven days but has witnessed a 5% surge in the last 24 hours. According to CoinMarketCap, the performance of major digital assets shows that these cryptocurrencies lag behind memecoins that have registered significant gains in the last 24 hours. FARTCOIN and AI16Z currently lead the pack with double-digit gains. AI16Z soared by 24.43%, while FARTCOIN registered 25.48% gains in the same duration.

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