- USDC supply has surged to a two-year high, signaling investor caution.
- Many are wondering: Is this the calm before the storm?
Are investors pulling back in the New Year? USD Coin [USDC] supply has surged to $2 billion – its highest in 707 days, while the global crypto market cap falls 3.49%.
History hints at a pullback, but with the current volatility, could a crash be looming instead?
As investors flee to USDC for safety…
Trump’s inauguration is behind us, the SEC has approved its first crypto regulation, and Bitcoin is still 6.18% below its $109K all-time high.
No doubt, this week’s volatility has investors divided – some are pulling back, while others are HODLing strong, leaving BTC caught in a tug-of-war.
The good news? BTC is holding above $100K, a level that’s sparked rebounds recently. In the last two weeks, BTC has dropped to this level three times, each time triggering an increase in outflows.
Looks like investors are seeing this as a dip to buy.
However, Bitcoin is just 3.54% above its weekly gains that pushed it past $109K. If those gains slip, BTC could fall to $98.4K. Adding to the caution, USDC supply has spiked to a two-year high.
In just three days, USDC across exchanges dropped 17.21%, with Binance seeing an 18% decline. The jump in USDC supply to $2 billion from just $303K the previous day isn’t a fluke – investors are clearly playing it safe.
Source: CryptoQuant
As more investors move to USDC or cash out after realizing profits, the pressure to absorb this liquidity now falls on institutions.
MicroStrategy is doing its part, having already made two purchases totaling 3,600 BTC this month alone.
And it doesn’t stop there. BlackRock just made their largest Bitcoin buy of the year – $600 million worth of BTC. Could this be a sign of more institutional buying ahead that could stabilize the market?
Whose stability will investors choose?
Despite Bitcoin’s price fluctuations, ETFs are seeing steady inflows, keeping BTC above $100K with institutional support.
However, the decline in greed signals a shrinking risk appetite, with investors flocking to stablecoins like USDC instead of Bitcoin. The debate over Bitcoin as a ‘safe haven’ is clearly intensifying.
In fact, $818 million worth of Tether USD (ERC20) coins moved off exchanges just a day before Trump’s swearing-in ceremony – the largest outflow in a year.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price Prediction 2025–2026
With Trump’s radical policies already grabbing headlines, it’s no surprise investors are exercising caution.
Now, with stability in question, the focus is on which asset will dominate – stablecoins or Bitcoin. For now, stablecoins seem to have the upper hand, but the battle is far from over.
