Are Investors Pulling Back in the New Year? USD Coin [USDC] Supply has Surged to $2 Billion – its Highest in 707 Days, while the Global Crypto Market Cap Falls 3.49%

History hints at a pullback, but with the current volatility, could a crash be looming instead? As investors flee to USDC for safety…

Investors are pulling back from the market en masse as the global crypto market cap fell by 3.49%, reaching $2.38 trillion. However, a closer look at the market reveals a different story.

Despite the market downturn, Bitcoin’s price remained relatively stable above the $100K mark throughout the week. This stability was largely driven by investors seeking refuge in stablecoins, such as USD Coin [USDC], due to the uncertainty in the market.

As a result, the supply of USDC surged to $2 billion, marking its highest level in 707 days. This massive increase, coupled with the influx of investors into USDC, highlighted the fear gripping the market.

Moreover, the shift into stablecoins also put pressure on institutions to absorb the liquidity. This was evident in MicroStrategy’s two purchases, totaling 3,600 BTC, and BlackRock’s largest Bitcoin purchase of the year, amounting to $600 million in BTC.

On the other hand, Bitcoin ETFs continued to attract inflows, which helped propel BTC past the $100K mark with institutional support. However, the declining greed signaled a shrinking risk appetite, as investors opted for stablecoins like USDC over Bitcoin, highlighting the debate over Bitcoin’s status as a ‘safe haven.’

In related news, a day before Trump’s swearing-in ceremony, a whopping $818 million in Tether USD (ERC20) coins exited exchanges, marking the largest outflow in a year. This event occurred amidst Trump’s bold policies, which saw investors exercising caution.