Stablecoin Inflows Return After Nearly Four Months of Outflows

Stablecoin net flows over the past 30 days turned positive for the first time since May, ending 113 consecutive days of net outflows and marking a shift after months of outflows from exchanges.

However, on-chain analyst Axel Adler Jr. warns that the rebound is losing momentum, while the broader market signals remain neutral.

Stablecoin net inflows turned positive on Sept. 1, when the 30-day average of ERC-20 stablecoin flows to exchanges moved above zero. Net inflows totaled $13.85 million that day, marking the first positive reading in nearly four months.

The rebound, however, has weakened quickly. Net inflows fell from $13.85 million on September 1 to $6.85 million by September 3, a roughly 51% decline in two days.

Another metric tracked by Adler, Bitcoin’s Stablecoin Supply Ratio (SSR), points to a modest improvement in stablecoin buying power relative to Bitcoin, although the recovery remains limited.

SSR compares Bitcoin’s market value with the total supply of stablecoins and is used as a gauge of potential buying power. A lower SSR generally means stablecoins have more purchasing power relative to Bitcoin.

SSR fell from its August highs, suggesting stablecoins have regained some relative buying power. The ratio stood at 13.84 on September 1, while its 90-day, 200-day and 365-day oscillators remained above zero at +0.215, +0.249 and +0.162, respectively. All three have declined from their August 26 peaks.

The readings suggest that stablecoin buying power is improving, but has not yet returned to its recent trend, Adler said.

“Exchange flows are no longer clearly negative, while SSR is retreating from its recent local high, but neither metric confirms a sustained expansion in liquidity yet,” Adler said.

Adler said a sustained liquidity reversal would require both an expansion in net inflows and a further decline in the SSR oscillators.

If inflows continue to increase, the data would provide stronger evidence that liquidity is returning to exchanges. If exchange net flows turn negative again, however, the September shift could prove temporary.

Positive stablecoin inflows signal that more liquidity is moving onto exchanges and is potentially available to buy crypto assets. If inflows continue to grow, it would strengthen the case that market liquidity is recovering after months of outflows.