Coinbase just welcomed $1.4 billion in USDC inflows

A large amount of USDC has flowed into Coinbase over the past day. The on-chain metric of interest here is “Exchange Inflows”, which tracks the total amount of a given asset going into a wallet associated with a centralized exchange or group of platforms.

A sharp rise in exchange inflows could indicate that investors are interested in trading cryptocurrency currencies. For an asset like Bitcoin, this trend can naturally be a bearish signal for the price.

In the context of the current discussion, though, stablecoins are in focus. While the USDC trade inflow also means that holders want to sell the asset, the transaction does not affect the price because, essentially, the token has always been stable at around $1.

However, this does not mean that the entire cryptocurrency industry is not interested in the sale of dollar coins. If an investor swaps a stablecoin for a volatile coin such as Bitcoin, the price of the latter’s asset will have a buying effect.

The inflows, totaling $1.4 billion worth of stablecoins, went into the platform’s wallet, the largest ever on the exchange. Given its extraordinary size, this could be quite bullish for Bitcoin and other currencies if the entity behind the inflow plans to make purchases with this dry powder.

However, there is also a case where the whale actually intends to exchange the dollar coin for fiat currency, and not use it to buy other cryptocurrencies. In this case, the net capital will exit the sector, which will be a bearish signal.

It’s unclear whether the large amount of USDC deposits will indeed end up causing any significant fluctuations in market volatility, specifically the price of Bitcoin.