USDC, USDT, and BUSD supply exchange spikes, but is this a good sign?

  • Stablecoin inflow from exchanges has been on the rise in the wake of the FTX saga.
  • It appears that users are holding onto their assets, which could have a negative impact on the exchanges if they continue.

In recent memory, there has not been a more challenging calendar year for the cryptocurrency industry than this one. The terra The disaster of 2022 had far-reaching repercussions that are still being felt today.

The FTX The crash was another major event that sent shockwaves through the cryptocurrency industry, the consequences of which are still being felt today. According to the latest data from Santiment, cryptocurrency users seem to be increasingly taking matters into their own hands, with the influx of Stablecoin increasing.

Self care

Leaders in business share them impression On how to move forward in the aftermath of the FTX crash. For now, the exchanges seem to be a weak point Dan HeldMichael Saylor W Changpeng Zhao (CZ) urges cryptocurrency owners to practice self-care.

Users, in their view, are completely at the mercy of the exchange once they have deposited their assets there and are vulnerable to any problems that may arise. This rallying cry from this industry heavyweight seems to have been heard and acted upon by stablecoin holders.

Stablecoin holders take self-care advice

Stablecoin holders appear to have increased withdrawals from exchanges, according to statistics from Santiment. The over-the-counter view shows that USDC, BUSD, and USDT have seen significant exchanges over the past few days. The outflow for USDC was $39.58 billion, for USDT it was $24.82 billion, and for BUSD it was $6.1 billion at the time of writing.

Source: feeling

There may be a correlation between recent events in the cryptocurrency space and the increase in outflows. Circle recently reported in a filing that USDC has taken a hit as a result of higher US interest rates.

According to them, this has led to an increase in withdrawals. This change applies not only to USDC but also to other major stablecoins. Some customers have also been required to withdraw their stablecoins from exchanges as a result of the recent FTX crash.

Fear of liquidity can lead to illiquidity

An increase in withdrawals may indicate that the exchanges are losing liquidity. This means that there will soon be a serious shortage of salable assets in the market as more and more consumers withdraw their funds from various exchanges.

This will lead to illiquidity due to the panic that follows its expectation. We could see the cryptocurrency equivalent of a bank if confidence in these markets continues to erode and users continue to withdraw their funds.

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