After Tether (USDT) recently dropped below $1, all attention has shifted to USDC as investors re-evaluate their preference for stablecoins due to the increased market cap of USDC.
Here are two metrics that serve as evidence regarding the growing demand for USDC.
reduced liquidity
According to data from Glassnode, on the Uniswap exchange, USDC liquidity is declining to a level that was last seen 16 months ago.
Therefore, this decreased liquidity on Uniswap is a sign that demand is increasing and also suggests that investors are leaning towards stablecoins.
increased supply
It is not just decreased liquidity that is indicating increased demand for USDC. Sentiment data suggests that exchanges have seen an increase in USDC supply since May 17, even though the USDC price had returned to its normal range.
When compared to UST supply, since it experienced de-pegging, UST supply on the exchanges is down. Although data shows that UST supply is nearing an all-time high, supply has just risen to levels recorded in the month of April.
The growing role of USDC in the crypto space
USDC velocity was declining at the time of publication, indicating that fewer USDC stablecoins were traveling between addresses. However, this does not guarantee that nothing will change for investors.
Meanwhile, according to data from Glassnode, the top 1% of addresses only held about 91.226% of the USDC supply. While this may sound like a lot, it is just a 13-month low.
Another report by Glassnode, published on May 16, suggests that USDC has reversed a supply trend that was in contraction since late February to rise to $2.639 billion.