According to on-chain data, USD Coin has increased in reserves recently. This suggests that some investors are exiting volatile markets such Bitcoin.
USD Coin All Exchanges Reserve has been Climbing up Recently
An analyst pointed out in a CryptoQuant posting that there were signs of Bitcoin investors selling to move into USDC.
The USD Coin “all exchanges reserve” is an indicator that measures the total amount of the stablecoin currently present in wallets of all exchanges.
Investors will either shift to stablecoins from cryptos or deposit their USDC into exchanges when this metric rises in value.
Stablecoins, such as USD Coin, are a good choice for investors who want to get away from volatility in cryptos like Bitcoin.
The opposite is true. If the reserve value drops, that means the USDC exchange rate decreases.
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Investors may feel now is the best time to jump into volatile markets. Or, it could simply be that holders are withdrawing their funds to fund personal expenses.
Here’s a chart showing the USDC All Exchanges Reserve over the past few months.
The indicator seems to have been increasing in value over the past few days. Source: CryptoQuant| Source: CryptoQuant
You can see that USD Coin has seen an uptrend over the week as shown in this graph.
This chart shows also the USDC Inflow Trend to Exchanges. It is another indicator that indicates the amount of stablecoin being moved into central exchanges.
It seems like the inflows haven’t been abnormally high recently, but the reserve has still been experiencing upwards movement.
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This could mean that the increase in the reserve isn’t just due to investors depositing their USDC, but also from them exchanging cryptos like Bitcoin for the stablecoin.
This could suggest investors leaving volatile markets because of the uncertain market environment. The recent sell-off could be detrimental to Bitcoin’s and other cryptocurrency values.
Bitcoin Prices
At the time of writing, Bitcoin’s price floats around $19.1k, down 7% in the last seven days. In the past month, crypto lost 35%.
Below is a chart showing the change in coin price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Featured image by Kanchanara at Unsplash.com. Charts from TradingView.com and CryptoQuant.com.