USDC Trading Volume Plunges to a 14-Month Low amidst Bitcoin Bull Run

04/07/2023 07:54 • Digital Disruptors • 80 views

According to reports, data shows that the trading volume of USDC has just reached a 14 month low of $232782968.57 in the past hour (7d MA).

USDC trading volume hit a 14 month low

The USDC trading volume has plummeted to its lowest level in 14-months at $232,782,968.57 in the past hour (7d MA), painting a dismal picture for traders and investors. This report comes at a time when cryptocurrencies, particularly Bitcoin, have been experiencing a significant upsurge in price, with Bitcoin alone hitting a record high of over $64,000 earlier this year. In this article, we will delve deeper into what USDC is, explore the reasons behind its low trading volume, and examine the possible implications for traders and investors.

What is USDC?

USDC (USD Coin) is a stablecoin cryptocurrency pegged to the US dollar that was launched in 2018 by Circle and Coinbase. Its primary purpose is to facilitate quick and low-cost transactions across different cryptocurrency exchanges and to provide investors with a stable store of value amidst the volatile cryptocurrency market. USDC’s value is guaranteed by a reserve of real-world assets, such as US dollars and short-term US Treasury bonds held by regulated financial institutions.

Possible Reasons behind USDC’s Low Trading Volume

1. Attraction to alternative stablecoins

USDC is not the only stablecoin currency, and traders may be switching to other alternatives such as Tether, which is pegged to the US dollar and operates in a similar manner. Tether currently has a higher trading volume due to its popularity among traders and availability on more exchanges.

2. Lower demand for USDC with Bitcoin’s bull run

Bitcoin’s gain has fueled the cryptocurrency market’s growth, lowering the demand for USDC, which is seen as a stable investment choice. Traders may opt to invest in Bitcoin, resulting in the decline of USDC trading volume.

3. Limited exposure of USDC to decentralized finance (DeFi)

The DeFi market has been rapidly growing since last year, but USDC has had relatively limited exposure in this market compared to other stablecoins, for example, DAI and USDT. This has caused a significant drop in the demand for USDC.

Implications for Traders and Investors

The USDC slump could mean that investors and traders view it as a less attractive option for trade, particularly at a time when Bitcoin and other cryptocurrencies are experiencing upward price movements. Traders should consider diversifying their portfolios to mitigate the risk of over-exposure to any single cryptocurrency in the market. Investors should undertake due diligence and monitor the cryptocurrency market to determine the most effective investment strategy.

Conclusion

The rapid growth of the cryptocurrency market has seen the emergence of various digital currencies, with USDC being a glimpse of stability amidst the market volatility. However, with the current low trading volume, the future of USDC may be uncertain. While there are no indications that USDC will dissipate completely, traders and investors should continuously monitor market trends to make informed investment decisions.

FAQs

1. Can USDC ever be worth more than 1 US dollar?

USDC is pegged to the value of one US dollar, and it’s unlikely that it will be worth more than that value. However, it’s possible that the value could decline due to changes in market demand.

2. How is USDC different from Bitcoin?

USDC is a stablecoin cryptocurrency with a value pegged to the US dollar, while Bitcoin’s value greatly fluctuates based on market demand.

3. Is it safe to invest in USDC?

USDC is considered a relatively safe investment in the cryptocurrency market due to its stable value tied to the US dollar. However, like all investments, there are inherent risks, so research and market analysis are crucial before investing.

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