Experts debate what predicts the massive amount of stablecoins that have recently been withdrawn from exchanges and the flow of funds they cause. According to reports, the economic developments of March and April led to new highs in terms of volatility.
Investors are starting to withdraw funds from exchanges again
According to CryptoQuant data, stablecoin output from spot markets is increasing while entry is decreasing. The data shows that currently, the second-tier exit of stablecoins is more pronounced than the entry.
According to the report, during the crisis in early March, USDC experienced almost no exit from spot exchanges. However, the situation has been changing recently, with a significant trend from exiting investors.
While the data suggests that the exit of stablecoins from the spot markets is currently more pronounced than the entry, experts predict that this trend will not last long. They predict that the numbers will rise again, but they do not expect a situation where they will consistently exceed former peaks.
Why is the stablecoin market bustling?
Various factors, including regulatory uncertainty, market volatility, and the growing popularity of DeFi platforms, may have contributed to the current trend of exits from spot markets. Stablecoins are an important component of the crypto market and their movements have a significant impact on the overall market.
USDC, USDT and DAI: What will be the next move for these stablecoins?
Stablecoins dominated the crypto market until last year and have had their fair share in the industry. However, since the beginning of 2023, this sector has been in decline. According to data provided by Delphi Digital on April 20, the market cap of the coins has dropped from 20% to 10% over the past few months.
Stablecoins traditionally use it as a safe haven during times of market volatility, but the drop in dominance has shown that investors are becoming more comfortable taking risks in the crypto market.
Another indicator of the decline in interest in these coins was the decline in their aggregate supply. According to data from Glassnode, the total supply of the top four stablecoins has dropped significantly, down 23% from a peak of $161 billion to $124 billion.
This decline was reflected in the net flow of each stablecoin; USD Coin (USDC) saw the biggest drop at $20 billion, followed by Binance USD (BUSD) at $11.1 billion, Tether (USDT) and Maker (DAI) at $1.3 billion.
Additionally, the number of users sending stablecoins between addresses has also dropped. According to data from Dune Analytics, the number of stablecoin senders has dropped from 515,319 to 363,948 in the past few days.
What do these metrics indicate?
All in all, data from CryptoQuant shows a significant shift in the movement of stablecoins, with entry decreasing as exit from spot markets is increasing. While experts are predicting that the numbers will rise again, they do not foresee a situation where they will consistently exceed former peaks.
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