On-chain data shows the exchange inflows for the stablecoins USDC and USDT have skyrocketed recently. Here’s what this could mean for Bitcoin.
Exchange Deposits Of Top Two Stablecoins Have Registered A Sharp Rise
In a new X post, Glassnode co-founder Rafael has shared the latest data for the Net Position Change in the USDC + USDT Exchange Reserve. This metric keeps track of the net amount of these top two stablecoins that have been entering into or exiting out of centralized exchanges over the past month.
When the indicator has a positive value, the inflows of the stablecoins outweigh the outflows. Such a trend implies demand for trading away these assets among the investors.
Generally, holders keep their capital stablecoins to avoid the volatility of coins like Bitcoin. These investors may eventually plan to buy back into the volatile side when the market conditions become ideal.
Once that happens, they usually transfer to an exchange to swap their desired coin. These shifts naturally end up providing a buying boost to the price the asset. As such, many stablecoin exchange inflows can be bullish for Bitcoin and other cryptocurrencies.
Now, here is a chart that shows the trend in the Exchange Net Position Change for USDT and USDC over the last few years:
The value of the metric appears to have been quite high in recent days | Source: @n3ocortex on X
As displayed in the above graph, the combined USDT and USDC exchange netflow has observed a steep positive spike, which suggests that investors have potentially been looking to buy into Bitcoin and others.
This latest 30-day spike in the stablecoin net inflows is significantly larger than any observed during the last cycle, showing unprecedented market demand.
Given the timing of the inflows, it would appear likely that at least some of them have helped Bitcoin’s growth to the latest highs. And if the deposits don’t let off, these stablecoins may continue to fuel the cryptocurrency.
Another metric that hints at positive demand in the sector is the total market cap of these fiat-tied tokens, which has just set a new all-time high (ATH) of $191 billion, as CryptoQuant community analyst Maartunn has pointed out in an X post.
Looks like the value of the metric has been on the rise during the past year | Source: @JA_Maartun on X
Stablecoins represent one of the main inlets of capital into the cryptocurrency sector, so growth in them is generally a bullish sign, with the implication being that there is a higher amount of capital potentially waiting to be deployed into Bitcoin and others.
BTC Price
Bitcoin has been unable to pick a direction in the past couple of weeks as its price has been consolidating around the $95,000 level.
The price of the coin hasn't shown much movement recently | Source: BTCUSDT on TradingView