In the midst of a sudden inexplicable loss across most of the market, stablecoins are performing particularly well. In light of this, one anonymous investor has just minted one million new USDC — potentially with the goal to buy other cryptocurrencies on the cheap.
USD Coin (USDC) is a stablecoin that is fully backed by the U.S. dollar (USD). The cryptocurrency is developed and maintained by the CENTRE consortium, which was initially funded by Circle and Coinbase.
Unlike many other stablecoins, Circle’s USD Coin is highly transparent about its operating practices, publishing monthly audits to prove that it is fully solvent. This is in stark contrast to Tether (USDT), which has been accused of operating a fractional reserve on numerous occasions.
USDC Whale Enters
The newly minted USDC was tracked by Whale Alert, a platform that tracks the movement of large sums across a variety of major cryptocurrencies.
As it stands, the market capitalization of USD Coin sits at $425.3 million — a number that has been gradually increasing since April 2019. Despite this growth, USDC is still dwarfed by USDT in terms of 24-hour trade volume. Around $20 billion USDT are traded every day, compared to $166 million USDC.
1,010,735 #USDC (1,005,031 USD) minted at USDC Treasury
— Whale Alert (@whale_alert) August 28, 2019
Although more than 1 million USDC has now been minted, it may take several more days until it is transferred to the owner’s wallet from the treasury.
Some have speculated that the newly minted USDC comes at a suspiciously opportune moment, given that Bitcoin (BTC) and practically all other non-stablecoins experienced a dramatic sell-off today.
However, the link is tenuous at best, since the USDC tokenization process typically takes up to a couple of days, making any cause and effect relationship unlikely. Regardless, the newly minted USDC has more cryptocurrency purchasing power now than it did earlier today.
Typically, the minting of large amounts of USDC is taken as a bullish sign, since it is an indicator that new money is moving into the cryptocurrency space. Likewise, some analysts believe that printing new USDT can potentially contribute to a bull run, meaning the same is likely true for USDC — albeit on a lesser scale.
Is the minting of new USDC a bullish or bearish sign? How do you think the market will move in the coming weeks? Let us know your thoughts in the comments below!