USDC Stablecoins on Exchanges Doubled in January to Over $900 Million
2 min read
USDC stablecoins are flowing into exchange accounts like never before, providing a ready supply of purchasing power for crypto investors to add to their holdings or buy up any price dips.
USDC held in exchange accounts increased by more than 112% in January to more than $900 million, according to data collected by blockchain analytics firm Glassnode. The sharp increase follows recent all-time highs for Bitcoin, Ethereum, and DeFi-related governance tokens, indicating that buyers could be gearing up for the next leg of the bull market.
USDC is a dollar-pegged stablecoin, a tradable digital asset designed to always be valued at $1 USD. Stablecoins like Tether have been around since 2014, but have gotten a big boost in popularity from DeFi, also known as decentralized finance. DeFi uses automated code known as smart contracts, combined with decentralized blockchain networks like Ethereum, to provide financial products and services such as loans, asset swaps, and interest-bearing deposits.
Decentralized finance advocates expect the deployment of such financial offerings using blockchain networks to lower overall costs and democratize access while guarding against censorship from private or state actors.
USDC launched in September 2018 as a collaboration between fintech provider Circle and crypto exchange on-ramp Coinbase and has since become the second-most-used stablecoin, after Tether, with a current total supply of more than 6 billion.
Stablecoins have emerged as an essential part of the DeFi landscape, offering a way to denominate loans, interest payments, and other financial metrics in a familiar currency. Holding USDC also offers a faster way to buy into other cryptocurrencies when the time is right, compared to waiting for fund transfers and purchase orders to execute.
USDC held in exchanges also provides greater assurance that buyers will be able to get in on the action during times of high price volatility, when Coinbase and other crypto on-ramp services that convert from fiat currency into digital assets have become infamous for going down at the most inopportune moments.
Whatever induced the surge of USDC on exchanges, we know one thing for sure—there’s a whole lot more dry powder available to buy digital assets ready to go now than there was a month ago. That’s a promising development for those hoping to see even higher prices for their favorite crypto holding.
