Author: David Canellis, Blockworks; Translated by: Tao Zhu, Golden Finance.
As the debate intensifies over whether Saylor is a once-in-a-lifetime financial genius or just another overly leveraged trader, stablecoins are bringing more liquidity to the cryptocurrency market.
At least, this is in terms of the raw dollar value injected into the sector so far.
In just the past two months, MSTR has spent 17.5 billion USD on Bitcoin, as shown in the orange area of the chart below. Most of the cash came from buyers of zero-interest convertible bonds.
MicroStrategy's buying behavior can simply be viewed as one hand accepting USD and the other exchanging it for Bitcoin. Quick and inexpensive liquidity in exchange for risk exposure.
During the same period, the net inflow of Bitcoin ETFs in the USA increased by 16.5 billion USD. The ETH ETF net increased by 3 billion USD, with these flows represented in blue on the chart.
ETFs follow a process roughly similar to MicroStrategy but without bonds. They buy an equal amount of Bitcoin or Ethereum with investors' cash, transferring the risk exposure to shareholders and deducting fees.
Stablecoins, the volume of Bitcoin purchases by MicroStrategy, and ETF inflows have converged in November.
Then there are stablecoins. Since mid-October, stablecoin issuers have minted a total of 30.8 billion USD in tokens. Over 92% of the Inflow has gone to USDT and USDC.
In addition to Sky's USDS and the more peculiar alternatives that have emerged (such as Ethena's USDe and Usual's USD0), stablecoin managers generally adopt USD, purchase short-term government bonds and other Cash / Money Market equivalents, then issue new tokens in equal amounts to anyone making a wire transfer to supply them with cash.
Clearly, the flow of stablecoins is not the same as the ETF Inflow or the cash pipeline of MicroStrategy.
But they do represent a similar thing: a general impulse to enter the Cryptos market through various channels.
The liquidity in the past nine weeks has approached 68 billion USD—this is undoubtedly the largest liquidity wave on record.
