Fearful: In the past 7 days, Circle issued another ~11.2B USDC, redeemed ~10.2B, for a net increase of about $1B. USDC supply reached about $73.7B, with reserves of about $74B, mainly made up of U.S. Treasury bonds and deposits. Look—ETFs are exiting, yet the stablecoin supply is still expanding.
Although USDC net issuance doesn’t directly equate to buying pressure, if it isn’t entering trading, lending, or payment scenarios and only sits on exchanges and in custody accounts, the price transmission will be relatively weak. But it does represent an increase in available “on-chain” dollars within the financial system. Market trading demand, settlement demand, and on-exchange cash demand haven’t disappeared. Just remember to separate issuance volume, exchange balances, DeFi deposits, and real payments.
Although USDC net issuance doesn’t directly equate to buying pressure, if it isn’t entering trading, lending, or payment scenarios and only sits on exchanges and in custody accounts, the price transmission will be relatively weak. But it does represent an increase in available “on-chain” dollars within the financial system. Market trading demand, settlement demand, and on-exchange cash demand haven’t disappeared. Just remember to separate issuance volume, exchange balances, DeFi deposits, and real payments.