On-chain data shows that Coinbase has just witnessed its largest inflow of US Dollar coins (USDC). Here’s why this might be relevant to Bitcoin.
Coinbase Just Saw a $1.4 Billion Inflow into USDC
As pointed out by analyst Maartunn in a publish on X, a large amount of USDC flowed into Coinbase during the previous day. The on-chain indicator of interest here is the “exchange entry”, which monitors the total value of a given asset entering wallets associated with a centralized exchange or group of platforms.
An increase in exchange flow could indicate that investors are interested in trading the cryptocurrency. In the case of an asset like Bitcoin, such a trend could naturally be a bearish sign for the price.
In the context of the current discussion, however, a stable coin is in focus. Although USDC exchange inflows would also imply that the holder wants to sell the asset, the transaction would not affect the price since, by nature, the currency always remains stable 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 swapped stable coins for volatile coins like BTC, then the prices of the latter assets would see a buying effect.
Now, here is a chart showing the trend in 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 chart above shows that USDC exchange inflow has just recorded a huge increase. According to Maartunn, this flow was directed to the cryptocurrency exchange Coin base.
In total, US$1.4 billion in stablecoins entered the platform’s wallets with this flow, the largest the exchange has ever seen. Given the extraordinary scale, this could be quite bullish for Bitcoin and others if the entity behind the influx is planning to go on a buying run with this dry powder.
However, there is also the scenario where the whale actually intends to exchange the pile of US dollar coins in favor of fiat currencies, rather than using them to purchase other cryptocurrencies. In that case, a net amount of capital would be leaving the sector, which would be a bearish sign.
It now remains to be seen whether the huge USDC deposit actually ends up causing any noticeable fluctuations on the volatile side of the market, particularly in the price of Bitcoin.
Bitcoin Price
Bitcoin had previously seen strong upward momentum, surpassing the $70,000 level, but since then, the asset has fallen back into 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 image from iStock.com, CryptoQuant.com, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC’s opinion on buying, selling or holding any investments and, naturally, investing carries risks. We advise that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
