Stablecoin

USDC

Terra

Coin

<ul class="news-points"> 
 <li>Two significant stablecoin liquidity drops have occurred since Terra and FTX crashed.</li> 
 <li>Last September 2022, the Fed raised interest rates by 75 basis points from 2.33% to 3.08%.</li> 
 <li>The USDT and USDC liquidity dropped by $1 billion, equivalent to a 55% drop following the rate hike.</li> 
</ul> 
According to Tom Wan, Research Analyst at 21.co, two significant <a href="https://coinedition.com/what-is-a-stablecoin/">stablecoin</a> liquidity drops have occurred since Terra and FTX crashed. Wan used on-chain data to identify a corresponding behavior in the USDT and USDC liquidity on AAVE V2 as measured against the Fed’s fund rate. 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper"> 
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 .<a href="https://twitter.com/aave?ref_src=twsrc%5Etfw" target="_blank" rel="nofollow">@aave</a> V2 USDT+USDC Liquidity vs FED Fund Rate 2 Significant drop in liquidity post Terra &amp; FTX Sep 2022: – FED raises 75bps from 2.33% to 3.08% – USDT &amp; USDC liquidity dropped by $1B (-55%) Jul 2023: – FED raises 25bps from 5.08% to 5.33% – USDT &amp; USDC liquidity dropped by… <a href="https://t.co/Vi65UjbWbk" target="_blank" rel="nofollow">pic.twitter.com/Vi65UjbWbk</a>— Tom Wan (@tomwanhh) <a href="https://twitter.com/tomwanhh/status/1722876480655646803?ref_src=twsrc%5Etfw" target="_blank" rel="nofollow">November 10, 2023</a>
 </blockquote>
 <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div>
</figure> 
The research analyst recently posted about the correlation between the Fed’s fund rate and the stablecoin liquidity on X. In the post, Wan revealed that in September 2022, the Fed raised interest rates by 75 basis points from 2.33% to 3.08%. Following the interest rate incre…
The post <a href="https://coinedition.com/the-feds-fund-rate-correlates-with-stablecoin-liquidity-analyst/">The Fed’s Fund Rate Correlates With Stablecoin Liquidity: Analyst</a> appeared first on <a href="https://coinedition.com">Coin Edition</a>.

The Fed’s Fund Rate Correlates With Stablecoin Liquidity: Analyst

Coin Edition

Other articles published on Nov 10, 2023

XRP Struggles Against $1 Resistance, Arbitrum Creates Strong Support, InQubeta Picks up Steam

Shibarium News: Unveiling the Future of Decentralized Finance and Blockchain Innovation

UNH Stock Price Prediction 2023, 2024, 2025: UNH Gaining Pace Above $500

Polygon’s ambitious plan to revitalize Its ecosystem: A $78 million boost

Top 5 Potential Long-Term Gems With 20–50x Potential

Mysterious Encounter in “Lords of the Fallen”

Join our free newsletter for daily crypto updates!