[Context]
Exchange reserves mirror the amount of digital assets held in centralized exchange (CEX) wallets, reflecting available liquidity. The reserves indicate market sentiment, influence price stability, and signal potential buying or selling pressure. In this article, we'll explore the stablecoin (ERC-20) and bitcoin reserves of Binance.
[Correlation]
From 2023 to 2024, Binance’s stablecoin and bitcoin reserves were closely correlated, while the growing stablecoin reserves provided liquidity for bitcoin purchases. However, this correlation started to weaken in late 2024.
[Decoupling]
A new trend emerged in early 2025: reserves have been diverging rapidly, with stablecoin reserves increasing quickly and bitcoin reserves decreasing, shifting their prior correlation into a decoupling. Consequently, in June 2025 Binance’s USDT and USDC reserves reached all-time high levels at $31 billion.
At the same time, the whole stablecoin market capitalization has been surging, recently breaching the $254 billion mark. Tether’s USDT remains the largest stablecoin with a market cap of more than $159 billion, while USDC maintains the second position with over $62 billion cap.
So what’s behind the decoupling of stablecoin and bitcoin reserves? First of all, during a bull cycle, bitcoin units are usually withdrawn from exchanges into private wallets and allocated to long-term cold storage. On the other hand, the growing stablecoin reserves can be explained by sidelined capital, representing unused “dry powder”, ready to deploy.
[A Brewing Liquidity Explosion?]
High stablecoin reserves on Binance indicate capital waiting to deploy, as stables are often held as a low-volatility assets to quickly enter markets when opportunities arise.
When these stablecoin reserves eventually flow back to other cryptocurrencies, a potential “liquidity explosion” emerges. Additionally, declining stablecoin reserves could trigged a long-awaited altseason.
Written by oinonen_t
