When exchanges begin to receive stablecoins in large quantities, most times it is a sign that institutions are preparing to buy. Currently, it has not happened yet, because of the current market conditions, stablecoins such as USDC have continued leaving exchanges as the bear market deepens.

On Oct. 8, CEO Ki Young Jun of CryptoQuant noticed that 94% of the USDC supply is held off exchanges, and a large percentage of it is held by traditional finance institutions.

Although, other crypto-native stablecoins seem to be flowing into exchanges, and they have a higher amount stored on them.

According to CryptoQuant, Tether has about 25% of the supply sitting on trading platforms. While for Binance USD, the number is way above 70%, and this is probably because of the yield opportunities that Binance offers for its native stablecoin.

The Biden administration has been pushing Congress and urging policymakers to hasten their decisions with crypto regulations and as a result, regulatory pressure is mounting in the United States. When a framework is finally agreed on, one of the first things that will come under the regulatory spotlight is stablecoins. Janet Yellen, secretary of the treasury has targeted them as a top priority for any new legislation.

A regulated stablecoin market where issuers prove their backing through audits could be the green light for institutions that have been on the sidelines so far. And this could lead to the inflow of stablecoins into exchanges thus signaling the next bull market.

However, it is unlikely to happen this year in terms of U.S. regulations, so the crypto winter will most likely continue into 2023 before any bullish run starts to take place.

Featured Image Source: cryptopotato.com