Stablecoins play a crucial role in the cryptocurrency industry. These currencies, representing fiat currencies in digital form, provide price stability and can be converted to nearly any crypto asset. USDC, the second-largest stablecoin by market cap, notes a volume spike on Uniswap and high exchange withdrawal requests.
USDC Volume on Uniswap Spikes
Most people will agree that Uniswap si the world’s leading decentralized exchange protocol. It has hundreds of trading pairs, even though it still runs on the Ethereum blockchain and inefficient infrastructure. Even so, both versions 2 and 3 of the protocol remain of great interest to traders and users seeking to become liquidity providers. It is also home to ample stablecoin trading volume.
Speaking of stablecoin trading, it appears USDC trading on Uniswap is rising significantly. While the reason for this increase remains unclear, triggering a six-month volume spike is impressive. Over $73.62 million worth of USD Coin changed hands on Uniswap earlier today. That is a high number, even if centralized exchanges see volumes of over $500 million somewhat regularly.
The previous six-month high for USDC volume on Uniswap was roughly half this volume spike. It appears to confirm there is a growing demand for USDC trading. A bear market, such as the one currently bringing all prices down, is usually an excellent period for metrics like these to reach new highs. It also confirms traders use stablecoins to buy the dip and potentially diversify their portfolio a bit further.
Contrary to what some people may assume, there is no significant increase in the USDC supply. If more coins were minted, they could explain the rising trading volume on Uniswap. However, the market cap has risen by $129 million, yet over half of that ended up on Uniswap right away seems unlikely. However, the protocol represents roughly 30% of all USDC trading across the industry.
USD Coin Exchange Withdrawals Mount
One thing is evident: more users are moving their USD Coin from exchange wallets. Whether that is for decentralized purposes, such as Unsiwap trading, or otherwise, remains unclear. The new one-month high might seem insignificant at first, but it remains intriguing either way. The chart below confirms that this asset sees regular ups and downs for exchange withdrawals, which is interesting.
Assuming some of these withdrawals move funds to Uniswap would explain why that protocol’s trading volume spiked. However, very few people will move funds from centralized exchange to Uniswap to explore new market opportunities. It might be easier to acquire USDC from Uniswap itself through a different trading pair and then explore alternative markets. Either way, very exciting momentum for this stablecoin.