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Analytics platform Santiment is revealing where deep-pocketed Bitcoin (BTC) investors parked their money following the crypto sell-off.
Santiment says that crypto whales could have invested in government debt in the US and other countries as a result of interest rate increases by the Federal Reserve and a gloomy economic outlook.
“One thing that was giving traders hope was the fact that large stablecoin market caps were growing through May of this year.
But when Federal Open Market Committee (FOMC) interest rate hikes and recession scares began to really take hold of investors’ speculative decisions, it became much harder for large holders to justify keeping such a large amount of dollar-pegged crypto on the sidelines.
The very likely implication is that these large institutions and whales are holding their money in US and world treasuries instead. Crypto is simply too unappealing to them (for now) with so much uncertainty that has been going on throughout 2022.”
According to Santiment, the combined market cap of stablecoins Tether (USDT) and Circle-backed USD Coin (USDC) has fallen to a 10-month low.
For Bitcoin bulls, the analytics platform says that BTC is likely to see an increase in value if the market capitalization of the largest stablecoins starts to swell.
“Bulls will want to watch and see whether the largest stablecoins begin to see increases in their market caps once again.
If they do, Bitcoin and crypto prices can justify a rise even if whale supply of Bitcoin and Ethereum stay low.”
Bitcoin is trading at $20,616 at time of writing.