Investors have withdrawn hundreds of millions of USDC tokens from exchanges over the past day, and it could only mean three things.
By Wahid Pessarlay
Editor Julia Sakovich
Updated
2 mins read
The cryptocurrency market has been struggling over the past two weeks, as Bitcoin BTC $111 527 24h volatility: 1.9% Market cap: $2.22 T Vol. 24h: $46.08 B and many leading altcoins have recorded notable declines from their local and all-time highs.
The global crypto market capitalization fell from $4.2 trillion on Aug. 14 to $3.8 trillion at the reporting time, according to CoinMarketCap data. Moreover, the investor sentiment index declined from the bullish 68 to the neutral 42 in the same timeframe.
Due to the recent bearish consolidation, which caused BTC to fall to $108,000 and Ethereum ETH $4 366 24h volatility: 0.8% Market cap: $528.12 B Vol. 24h: $32.53 B to $4,200, investors have taken a U-turn in their positions.
According to data from CoinGlass, roughly 811 million USDC USDC $1.00 24h volatility: 0.0% Market cap: $72.03 B Vol. 24h: $13.95 B left the leading centralized crypto exchanges over the past 24 hours. Coinbase leads the list with 688 million USDC withdrawals.
Currently, the number of USDC tokens on exchanges is at 11.5 billion. The second-largest stablecoin saw a massive CEX inflow in mid-August, rising from 3.2 billion USDC on Aug. 8 to 12.3 billion USDC on Aug. 15.
This movement brought in the BTC and ETH record prices.
The largest stablecoin, USDT USDT $1.00 24h volatility: 0.0% Market cap: $168.06 B Vol. 24h: $88.75 B , recorded a 318 million token outflow from CEXs.
When stablecoins, like USDC, for instance, enter CEXs, it usually hints at a buying spree and the appetite for risky assets, and vice versa.
The 811 million USDC withdrawals from exchanges could show that some investors are taking a cautious approach as the market movements remain uncertain.
However, being negative is not always the case. Since the overall market sentiment is still neutral and there are strong expectations of an altseason for September, there could be two bullish cases for the stablecoin withdrawals. Firstly, the on-chain rotation is picking up. DefiLlama data shows that the decentralized finance total value locked gained 0.9% to $152 billion.
In simple terms, it could hint at increased DeFi participation.
Secondly, over-the-counter deals or strategic institutional purchases might be happening behind the scenes. For example, funds and treasury companies might be preparing to accumulate digital assets using USDC.
To conclude, the stablecoin withdrawals could be a sign of quiet confidence, not fear.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Wahid has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his name and his work has been featured on some of the leading outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Other than reporting, Wahid likes to connect the dots between DeFi and macro on his newsletter, On-chain Monk.
