- USDC supply has risen to a two-year high, signaling investor caution.
- Many are wondering: is this the calm before the storm?
Are investors retreating in the new year? USD coin [USDC] supply has risen to $2 billion – the highest in 707 days, while the global cryptocurrency market cap is down 3.49%.
History points to a pullback, but given current volatility, could a crash loom instead?
As Investors Flee to USDC for Safety…
Trump’s inauguration is behind us, the SEC has passed its first crypto regulation, and Bitcoin is still 6.18% below its all-time high of $109,000.
Undoubtedly, this week’s volatility has divided investors, with some retreating while others continue to HODL strongly, leaving BTC in a tug-of-war.
The good news? BTC is holding well over $100,000, a level that has recently led to a recovery. In the past two weeks, BTC has fallen to this level three times, each time resulting in a price increase outflow.
It seems that investors are seeing this as a buying dip.
However, Bitcoin is only 3.54% above the weekly gain that pushed it past $109,000. If these gains diminish, BTC could fall to $98.4K. Adding to the caution, USDC supply has risen to its highest level in two years.
In just three days, USDC fell 17.21% across all exchanges, while Binance saw an 18% decline. The increase in USDC supply to $2 billion, from just $303,000 the previous day, is no fluke; Investors are clearly playing it safe.
Source: CryptoQuant
As more investors switch to USDC or cash out after realizing profits, the pressure to absorb this liquidity now falls on the shoulders of institutions.
MicroStrategy is doing its part and has already created two purchases 3,600 BTC this month alone.
And it doesn’t stop there. BlackRock just made their biggest Bitcoin purchase of the year: $600 million worth of BTC. Could this be a sign of more institutional buying that could stabilize the market?
Whose stability will investors choose?
Despite Bitcoin’s price fluctuations, ETFs remain stable inflowleaving BTC above $100,000 with institutional support.
However, the decline in greed signals a decline in risk appetite, with investors flocking to stablecoins like USDC instead of Bitcoin. The debate about Bitcoin as a ‘safe haven’ is clearly intensifying.
In fact, $818 million worth of Tether USD (ERC20) coins were delisted just a day before Trump’s swearing-in ceremony – the largest outflow in a year.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price forecast 2025–2026
Now that Trump’s radical policies are already taking hold headlines, It’s no surprise that investors are cautious.
With stability at stake, the focus is on which assets will dominate: stablecoins or Bitcoin. For now, stablecoins appear to have the upper hand, but the battle is far from over.
