Why Avalanche’s Stablecoins Are Partying While AVAX Is Crying in the Corner! 🎉😢

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It appears that our dear friend Avalanche has been experiencing a rather remarkable surge in stablecoin supply over the past year. One might say it’s akin to a rather boisterous party, yet the utility token seems to be sulking in the corner, nursing a drink and pondering the meaning of life.

According to the latest missive from the Avalanche camp, the supply has ballooned by a staggering 70% in the past year, leaping from a modest $1.5 billion in March 2024 to a rather impressive $2.5 billion by March 31, 2025. Quite the financial growth spurt, wouldn’t you agree?

Now, stablecoins are the darlings of the crypto realm, serving as a bridge between the old-fashioned fiat currencies and their digital counterparts. They often herald a surge in buying activity and investor confidence, much like a well-timed toast at a wedding.

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However, our friend Juan Pellicer, a senior research analyst at IntoTheBlock, has pointed out a rather curious conundrum. Much of this newfound liquidity, particularly from the bridged Tether (USDT), is lounging about in treasury holdings instead of gallivanting through the DeFi landscape for lending or trading. It’s like having a splendidly stocked pantry but opting for takeout instead!

Despite this $1 billion uptick in stablecoin supply, Avalanche’s AVAX token has taken a nosedive of nearly 60% over the past year. It had a brief flirtation with the $55.70 mark but is now trading at a rather dismal $19. One can only imagine the existential crisis it must be facing.

The decline in AVAX’s price is part of a broader crypto market malaise, driven by investor uncertainty. A significant factor is the impending announcement from former U.S. President Donald Trump regarding new import tariffs, which are intended to trim the $1.2 trillion trade deficit. These tariffs have sent shivers down the spines of investors, impacting riskier assets like cryptocurrencies.

According to the astute analysts at Nansen, there’s a 70% chance that the crypto market will hit rock bottom in the next couple of months as tariff negotiations continue and investor anxiety begins to wane. Fingers crossed, eh?

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Both the traditional and crypto markets remain in a state of limbo, anxiously awaiting the U.S. tariff announcement. In a report released on April 1, Nansen noted that BTC and key U.S. stock indexes have been unable to breach their 200-day moving averages, with shorter-term moving averages still on a downward trajectory. Quite the pickle!

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2025-04-02 17:57