On-chain data shows that Coinbase has just seen its largest ever USD Coin (USDC) flow. Here’s why it could be useful for Bitcoin.
Coinbase recently saw $1.4 billion in USDC inflows
As pointed out by analyst Martun in Post On X, a large amount of USDC has flown into Coinbase in the past few days. The on-chain indicator of interest here is “exchange inflow,” which tracks the total amount of a given asset entering wallets belonging to a centralized exchange or group of platforms.
An increase in exchange inflows may indicate that investors are interested in trading away from cryptocurrencies. In the case of an asset like Bitcoin, such a trend can naturally be a bearish signal for the price.
In the context of the current discussion, a stablecoin is the focus. USDC exchange inflows will also indicate that the holder wants to sell the asset, a transaction that will not affect the price because, by nature, the coin is always stable at around $1.
This does not mean that the sale of USD Coin is not of interest to the cryptocurrency sector as a whole. If investors are exchanging stablecoins for volatile coins like BTC, the buying effect will be reflected in the prices of these latter assets.
Now, here’s a chart that shows the trend of USDC exchange inflows over the past month:
The value of the metric seems to have been quite high in recent days | Source: @JA_Maartun on X
The graph above shows that USDC exchange inflows have recently increased significantly. According to Martun, the flow was directed towards cryptocurrency exchange Coinbase.
In total, $1.4 billion worth of stablecoins entered the platform’s wallets with this influx, the largest the exchange has ever seen. Given the extraordinary volume, this could prove to be very bullish for Bitcoin and others if the organization behind the inflow plans to buy with this dry powder.
A situation also exists, however, where a whale wants to trade a USD coin stack in favor of fiat rather than use it to buy other cryptocurrencies. In such a case, net capital would flow out of the sector, which would be a sign of recession.
It remains to be seen if the large USDC deposits cause significant fluctuations in the volatile side of the market, especially Bitcoin.
Bitcoin price
Bitcoin had previously seen a sharp bullish move to cross the $70,000 level, but since then, the asset has fallen back into a sideways movement, with its price remaining unchanged.
The price of the coin appears to have been consolidating in the last few days | Source: BTCUSD on TradingView
Featured images from iStock.com, CryptoQuant.com, charts from TradingView.com
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