Yonsei_dent
<Stablecoin Exchange Reserve has decreased, but volatility has increased?>
In the case of derivatives exchanges, as Stablecoin reserves increase, volatility will increase as they are considered to be used to open long/short positions. Especially in the crypto market, where the futures market is larger than the spot market, it is also important to monitor changes in stablecoins. After the December rally đŁAll Stablecoins Reserve decreased. Looking at this alone, one might think that Stablecoin liquidity would have decreased and volatility would have decreased. However, it should be noted that the cause is the decrease in đĄBUSD. Rather, USDT, which has a market share of over 72%, appears to move sideways and then slightly increase. (USDC did not show much change) The reason why BUSDđĄ has been continuously decreasing and has recently decreased significantly is as follows. Originally, new issuance of BUSD was prohibited due to SEC regulations, and only redemption was possible, so the size of BUSD has been decreasing. However, on December 15th, Binance discontinued support for BUSD. BUSD held by investors will be converted to a stablecoin called FDUSD (First Digital USD). Therefore, it is difficult to see that the number of stablecoins has substantially decreased, and since USDT, which accounts for most of the supply, is trending upward, volatility should be seen as gradually increasing. đIn addition to simply looking at the overall index, there are times when it is good to check the status and news of each stock from time to time.