In recent days, the impact of stablecoins on Bitcoin has continued to be a topic of discussion in the cryptocurrency world. Ki Young Ju, CEO of the renowned crypto analysis platform CryptoQuant, stated that the supply of stablecoins alone will not be enough to drive the Bitcoin markets.

Purpose of Stablecoin Use

Stablecoins have increasingly become a tool for storing value not only in countries with rapidly depreciating fiat currencies but also in those with stringent capital controls. This situation is changing the role of stablecoins in the market and prompting investors to turn to these assets. However, according to Ki Young Ju, the increase in the supply of stablecoins will not have a significant impact on Bitcoin prices.

Market Stagnation

Ki Young Ju argues that while the liquidity provided by stablecoins can be used for trading Bitcoin, it will not positively impact Bitcoin prices. The overall stagnation and uncertainties in the markets are making it difficult for investors to turn to volatile assets like Bitcoin. Therefore, the increase in supply is insufficient to stimulate a revival in the markets.

You Might Be Interested In: BitGo Appoints Former President to Oversee Stablecoin Business

Conclusion

In conclusion, the supply of stablecoins may not be sufficient on its own to drive the Bitcoin markets. Cryptocurrency investors continue to adopt a more cautious approach, taking into account the overall market conditions and uncertainties.

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FDUSD’s Market Performance Post-Update

We have discussed Binance and FDUSD (First Digital USD) in the past since Binance seemed to relist the stablecoin in an effort to replace BUSD following its shutdown. Initially listed with advantageous fee rates, the pairs with FDUSD are drumming excitement for the stablecoin, which it previously delisted in favor of their own stablecoin. Most importantly, BTC/FDUSD was free to trade.

BTC/TUSD became the only free way to trade bitcoin on the biggest crypto exchange when taker fees were reinstated on that pair. This helped bring the quite tiny stablecoin to the front stage.

December looks to be when Binance made several other significant FDUSD pairings also free to trade under a more general campaign.

With pairings of the stablecoin accounting for over 35% of spot trading on the market in April, FDUSD kept becoming more and more popular on the exchange, surpassing the peak reached by TUSD, which was Binance’s past effort at a successor to BUSD. BUSD pairs accounted for 39% of volume on the exchange in December 2022; FDUSD was showing to be a suitable rival, accumulating dominance in a far shorter period.

Comparing BTC/FDUSD and BTC/USDT Trading Volumes

But on April 25, Binance stopped the zero-charge FDUSD trading offer for the pairs made free to trade in December as well as for bitcoin. All the pairs still have a zero-maker fee promotion; TUSD has a comparable offer.

Although the dominance of FDUSD has been declining since the completion of the campaign, it still remains somewhat notable.

Still, the popularity of BTC and FDUSD seems to be not fading. In the past 24 hours, the pair did $4.5 billion in activity, compared to BTC/USDT’s $2.5 billion and BTC/TUSD’s $9.6 million. For other spot assets, however, the USDT/USD pairs rule.

Due to the no-maker fee, trading in many First Digital USD pairings still somewhat favors you, but it is not as big a pull. The bigger and more well-known stablecoin is USDT, which has maintained favoritism even without any incentives.

Though it’s unknown how much of Binance’s volume originates from the European Union, USDT pairs could eventually face pressure in the EU on the exchange as it looks to comply with the MiCA rule.

Still, it seems that First Digital USD was not substantially affected by the termination of free trade.

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