Santiment: The growth of cryptocurrencies will be preceded by an increase in the capitalization of stablecoins

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According to analysts at Santiment, as soon as investors begin to actively invest in stablecoins, prices for cryptocurrencies will rise even with a low supply of BTC and ETH.

Buyers will wait for the biggeststable coins will begin to increase market capitalization again, say market experts from Santimen. Financial analysts believe that cryptocurrency large and institutional investors, amid tightening policies of the Federal Reserve System (Fed), have invested money withdrawn from stablecoins into government bonds of the United States and other countries:

“The thing that gave hope to traders waswas that the market capitalization of stablecoins was growing in May of this year. But when the Federal Open Market Committee (FOMC) raised interest rates, fears about a recession began to really influence investors' speculative decisions. It has become much more difficult for large holders to justify keeping so much dollar-pegged cryptocurrency on the sidelines.” 

According to Santimen representatives, the investigationThe decision of large investors is to store funds in US and other countries' treasury bills. Cryptocurrencies with the uncertainty that is observed in 2022 are too unattractive for them, financial analysts emphasized.

But as soon as there is at least some certainty in the markets, investor funds will begin to return to stablecoins, and then to cryptocurrencies.

Chainalysis analysts reported thatThe use of dollar-pegged stablecoins is growing in Latin America, especially in countries with high inflation and local fiat currency devaluation. At the same time, exchanges are getting rid of unpopular stablecoins. Huobi recently announced that it will delist HUSD and will no longer support trading of this stablecoin. All HUSD will be converted to USDT at a 1:1 ratio.