Stablecoin Flows are Directly Impacting Treasury Yields: Messari
The post Stablecoin Flows are Directly Impacting Treasury Yields: Messari appeared on BitcoinEthereumNews.com. Large stablecoin inflows can even result in “quantitative easing” of long-term Treasury bill yields, according to the crypto research firm. Stablecoin adoption continues to accelerate, and according to Messari’s “State of Stablecoins” report, stablecoin capital flows are directly impacting the $28 trillion U.S. Treasury market. According to the report, which cites data and research from the Bank of International Settlements, “a multi-billion dollar weekly inflow into stablecoins is linked with a ~2.5 bp [basis point] drop in 3-month Treasury bill yields after 10 days, and upwards of ~5 bps reduction after 20 days.” It goes on to say that this knock-on effect from stablecoin popularity is “comparable to that of small-scale quantitative easing on long-term yields.” The correlation works both ways, with large outflows reportedly having an even greater impact on Treasury yields, raising yields by 6 to 8 bps over a ten-day period. Impact of Large Stablecoin Flows on Treasury Bill Yields – Messari Stablecoin growth has been a key theme of this market cycle, with the sector’s total market capitalization increasing by 101% to $262 billion from $130 billion at the beginning of 2024. This represents an increase of more than 800% since the beginning of 2021. Investor demand for exposure to stablecoin companies was showcased by the success of the Circle IPO earlier this year. Circle’s CRCL stock went public at between $27-$31 per share, and increased tenfold in a matter of weeks, reaching a high of $299 on June 24. CRCL currently trades at $198 per share, a 538% increase from the high end of its IPO price range. Additionally, the new stablecoin-focused Bitcoin sidechain, Plasma, raised $1 billion in capital nearly instantly during its ICO. The Plasma ICO is ongoing, and users have earned allocations to the ICO by staking USDT in Plasma’s vaults, which…
The post Stablecoin Flows are Directly Impacting Treasury Yields: Messari appeared on BitcoinEthereumNews.com.
Large stablecoin inflows can even result in “quantitative easing” of long-term Treasury bill yields, according to the crypto research firm. Stablecoin adoption continues to accelerate, and according to Messari’s “State of Stablecoins” report, stablecoin capital flows are directly impacting the $28 trillion U.S. Treasury market. According to the report, which cites data and research from the Bank of International Settlements, “a multi-billion dollar weekly inflow into stablecoins is linked with a ~2.5 bp [basis point] drop in 3-month Treasury bill yields after 10 days, and upwards of ~5 bps reduction after 20 days.” It goes on to say that this knock-on effect from stablecoin popularity is “comparable to that of small-scale quantitative easing on long-term yields.” The correlation works both ways, with large outflows reportedly having an even greater impact on Treasury yields, raising yields by 6 to 8 bps over a ten-day period. Impact of Large Stablecoin Flows on Treasury Bill Yields – Messari Stablecoin growth has been a key theme of this market cycle, with the sector’s total market capitalization increasing by 101% to $262 billion from $130 billion at the beginning of 2024. This represents an increase of more than 800% since the beginning of 2021. Investor demand for exposure to stablecoin companies was showcased by the success of the Circle IPO earlier this year. Circle’s CRCL stock went public at between $27-$31 per share, and increased tenfold in a matter of weeks, reaching a high of $299 on June 24. CRCL currently trades at $198 per share, a 538% increase from the high end of its IPO price range. Additionally, the new stablecoin-focused Bitcoin sidechain, Plasma, raised $1 billion in capital nearly instantly during its ICO. The Plasma ICO is ongoing, and users have earned allocations to the ICO by staking USDT in Plasma’s vaults, which…
What's Your Reaction?
