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Rising USDC deposits signal market shift: Can Bitcoin catch up?

2min Read

USDC’s surge in exchange deposits signals growing dominance, while Bitcoin struggles with key resistance levels.

STABLECOINS

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  • USDC’s growing dominance signals a shift in stablecoin preferences within crypto markets
  • Bitcoin’s stagnant performance raises concerns despite increasing stablecoin inflows and market interest

Recent reports show a significant rise in USDC exchange deposits, hinting at a shift in stablecoin preferences and market sentiment.

This surge highlights the growing role of stablecoins as a cornerstone of crypto market liquidity and transactional activity.

However, despite rising stablecoin inflows, Bitcoin’s price remains stagnant, struggling to break key resistance. This divergence raises questions about U.S. buying interest and the market’s near-term direction.

The rise of USDC and its growing market influence

Stablecoin deposits to exchanges are often seen as an early indicator of rising demand for cryptocurrencies.

Over the past weeks, USDC has emerged as a frontrunner, with a sharp increase in exchange deposits signaling its growing dominance. Meanwhile, Tether [USDT] deposits have been steadily declining.

The surge in USDC activity coincided with President Trump’s inauguration on January 20, suggesting alignment with pro-crypto U.S. policies and bolstering Circle’s position.

BTC price struggles amid absence of U.S. buying momentum

Despite the sharp 185.37% surge in USDC exchange inflows, Bitcoin [BTC] continued to struggle. At press time, the Coinbase Premium Gap remained deeply negative at -57.00, indicating weak U.S. spot buying demand.

While USDT exchange inflows are positive, they have declined by 2.99% overall, suggesting slightly reduced liquidity from traditional crypto traders.

The divergence between rising USDC inflows and BTC’s lackluster performance raises concerns about the sustainability of recent capital movements. Without renewed U.S. demand, Bitcoin faces resistance. A potential sell-off could emerge if institutional interest remains absent.

stablecoins

Source: CryptoQuant

Market conditions and Circle’s role in USDC growth

In 2024, USDC experienced significant growth, with its circulation increasing by 78% year-over-year, surpassing other major stablecoins.

This expansion is attributed to Circle’s strategic initiatives, including compliance with the European Union’s Markets in Crypto Assets regulation and adherence to Canada’s new listing rules.

These efforts have enhanced USDC’s credibility and accessibility in global markets. Additionally, Circle’s anticipation of U.S. executive orders facilitating bank involvement in cryptocurrencies could further bolster USDC’s adoption.


Read Bitcoin’s [BTC] Price Prediction 2025–2026


Factors influencing behavior and potential impact 

U.S. crypto investors have shown caution recently. The anticipated executive orders promoting bank engagement with cryptos may alleviate concerns and encourage increased participation.

The recent surge in USDC’s circulation reflects growing trust in regulated stablecoins. This could signal a shift toward more stable investment vehicles among U.S. buyers.

Speculation about a potential price bubble in U.S. AI tech stocks, fueled by China’s DeepSeek AI model, is growing.

This has heightened concerns about corrections in risk asset markets, potentially leading cryptocurrency investors to adopt a more cautious stance.

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Samantha is a full-time crypto journalist with 2 years of writing experience in the field. Her key area of interest is the political ramifications of crypto-centric laws around the world. An avid market trader, Samantha also has a keen eye for price anomalies on trading charts.
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