$9.3B ERC-20 Stablecoin Inflow to Exchanges Following Elections, Another Rally Coming?

Donald Trump’s win triggered massive gains for not just digital assets but also crypto-related stocks, and ETF flows on November 6 and 7 as stakeholders await potential regulatory clarity, legislative advancements, and expected shifts within the Securities and Exchange Commission.

Following the results, data showed billions worth of ERC-20 stablecoins flowing into exchanges. This could potentially signal an extension of the current rally.

ERC-20 Stablecoins Flood Into Exchanges

According to CryptoQuant’s latest analysis, there has been a significant surge in ERC-20 stablecoin inflows, totaling $9.3 billion, following the recent US presidential election results. This marks the second-largest influx of ERC-20 stablecoins ever recorded.

Among the major exchanges, Binance received approximately $4.3 billion, while Coinbase saw $3.4 billion in deposits, with the remainder flowing into smaller platforms. Historically, large inflows like these, particularly between September 2020 and February 2021, have been associated with bullish market rallies.

If this pattern holds true, the cryptocurrency market may be poised for another upward movement, potentially driving a new wave of market growth.

Many experts believe the US election results have ushered in a new era of a crypto bull market. QCP Capital’s investor note, for one, expressed confidence that Bitcoin’s positive momentum will continue as the market enters 2025.

Meanwhile, the Coinbase Premium Index, which tracks the price difference between Bitcoin on Coinbase and Binance, recently spiked to 0.06, its highest since September 14. Despite a subsequent drop to 0.04, the positive index suggests considerable buying pressure from US traders and institutional investors. The index suggests that Bitcoin’s bullish momentum may continue and lead to a more stable market rally.

Additionally, the Chicago Mercantile Exchange (CME) saw a significant surge in open interest, with nearly $1.2 billion added in a single day, as flagged by K33’s Head of Research Vetle Lunde. This marks the largest daily USD increase in open interest ever recorded, far surpassing previous daily gains.

Volatility Imminent

Such a significant spike indicates heightened market activity and investor interest, driven by increased trading volumes. This surge essentially signals an influx of institutional participation.

Short-term volatility, however, remains likely. This was further validated by Binance’s Open Interest (OI) reaching $8.3 billion on November 7th. This new peak indicated potential market volatility as well as increased liquidation risks. Weighing on the same, in a statement to CryptoPotato, Vishal Sacheendran, Head of Regional Markets at Binance, said,

“As more people recognize the value of digital assets for financial independence and portfolio diversification, we expect to see a further surge in interest in the asset class. With its adoption expected to increase even further, Bitcoin’s influence on the global financial landscape is set to expand in the coming future. While market fluctuations may cause some short-term volatility, the prospect of clearer regulatory frameworks has the potential to drive long-term stability and growth in the crypto space.”