Not since Jan. 2022 have the most adept on-chain traders held such a low percentage of their holdings in stablecoins, says the blockchain research firm.
Posted January 12, 2024 at 3:03 pm EST.
“Smart money” wallets have been decreasing their proportion of stablecoins, and that’s a sign that traders are in a risk-taking posture.
Blockchain research firm Nansen labels wallets and addresses as smart money when they meet at least one of several metrics of on-chain profitability and intelligence, such as receiving a substantial amount of coins across several airdrops or making more than $100,000 by being a liquidity provider on decentralized exchange Uniswap.
Right now, smart money wallets are allocating less than 9% of their holdings to stablecoins, a type of cryptocurrency that is pegged to a fiat currency such as the U.S. dollar as a means to provide price stability. A year ago — and two months after crypto exchange FTX filed for bankruptcy — stablecoins accounted for about 32% of total smart money holdings.
Smart money’s share of stablecoins as a percentage of total holdings. (Nansen)
The last time smart money’s holding of stablecoins sunk to this level was in Jan. 2022, when BTC was hovering around $42,000 and the total crypto ecosystem’s market capitalization stood at more than $2 trillion. At press time, BTC is priced around $43,700, while the global crypto market capitalization is nearly $1.8 trillion.
“Stablecoin holding is a good macro indicator showing where the mind of the smart money is. When the chart is peaking — for example, when it was in mid-2022 — that was the maximum risk-off state,” said Nansen data engineer Edgar Rootalu Friday morning in a live stream on YouTube.
The economy in mid-2022 was in turmoil, with high inflation, Fed rate hikes and layoffs across the crypto industry. On June 18 of that year, nearly 42% of smart money holdings were in stablecoins.
“As we see starting from 2023 they’ve been slowly increasing their crypto holdings and decreasing their stablecoin holdings so we’re nearing almost big risk-on behavior here,” Rootalu added.
Update (Jan. 12, 3:15 p.m. EST): Added the stablecoin portion of smart money wallets one year ago.
Update (Jan. 12, 3:11 p.m. EST): Added a descriptor for Nansen and defined the left axis of the graph.
- SEO Powered Content & PR Distribution. Get Amplified Today.
- PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
- PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
- PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
- PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
- Source: https://unchainedcrypto.com/diminishing-stablecoin-holdings-of-smart-money-traders-show-rising-risk-nansen/
- :is
- :where
- ][p
- 000
- 11
- 12
- 15%
- 2022
- 2023
- 2024
- 33
- 36
- 700
- 8
- a
- About
- accounted
- across
- added
- addresses
- adept
- After
- ago
- Airdrops
- almost
- amount
- and
- ARE
- around
- AS
- At
- Axis
- Bankruptcy
- been
- behavior
- being
- Big
- blockchain
- blockchain research
- BTC
- by
- capitalization
- Chart
- Coins
- crypto
- crypto exchange
- Crypto exchange FTX
- Crypto Industry
- Crypto Market
- crypto traders
- cryptocurrency
- Currency
- data
- data engineer
- decentralized
- Decentralized Exchange
- decreasing
- defined
- diminishing
- Dollar
- economy
- edgar
- engineer
- example
- exchange
- Fed
- fed rate hikes
- Fiat
- Fiat currency
- filed
- Firm
- For
- Friday
- from
- FTX
- Global
- Global Crypto
- good
- graph
- Have
- Held
- here
- High
- Hikes
- holding
- Holdings
- HTTPS
- in
- increasing
- Indicator
- industry
- inflation
- Intelligence
- IT
- Jan
- January
- jpg
- june
- Labels
- Last
- layoffs
- least
- left
- less
- Level
- Liquidity
- liquidity provider
- live
- Low
- Macro
- Making
- Market
- Market Capitalization
- max-width
- maximum
- means
- Meet
- Metrics
- mind
- money
- months
- more
- morning
- most
- Nansen
- nearing
- nearly
- now
- of
- on
- On-Chain
- ONE
- or
- pegged
- percentage
- plato
- Plato Data Intelligence
- PlatoData
- pm
- portion
- posted
- pre
- press
- price
- profitability
- proportion
- provide
- provider
- Rate
- rate hikes
- receiving
- reduce
- research
- rising
- Risk
- s
- says
- see
- sees
- several
- Share
- show
- showing
- sign
- since
- Slowly
- smart
- So
- Stability
- stablecoin
- Stablecoins
- Starting
- State
- stood
- stream
- substantial
- such
- than
- that
- The
- The Graph
- their
- they
- this
- time
- to
- Total
- Traders
- Trillion
- two
- type
- u.s.
- u.s. dollar
- Unchained
- Uniswap
- Unsplash
- Wallets
- was
- we
- were
- when
- while
- with
- year
- youtube
- zephyrnet