HomeNewsSurge in USDC Issuance Amid Bitcoin Market Slump: What's Next?

Surge in USDC Issuance Amid Bitcoin Market Slump: What’s Next?

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  • Large issuance of USDC stablecoins sparks speculation about potential market buy pressure.
  • Bitcoin market experiences increased volatility due to governmental sales and Mt. Gox repayment concerns.

The cryptocurrency market is abuzz with speculation following a substantial issuance of USDC stablecoins. Recently, 248,96M USD worth of USDC was issued on the Solana blockchain, followed by 227,18M USD on Ethereum, and 199,79M USD was deposited into Coinbase by the USDC issuer. These actions are often interpreted as signals of incoming buy pressure. Historically, large and institutional investors have used newly issued Tether (USDT) to make significant market purchases, which raises similar expectations for the latest USDC activities.

Source: Whale Alert
Source: Whale Alert

Bitcoin Market Turmoil and Future Projections

The past few weeks have been turbulent for Bitcoin, driven by continued sales from the US and German governments and concerns surrounding the Mt. Gox repayments. The Mt. Gox rehabilitation trustee recently moved a large amount of Bitcoin (1,544.67 BTC) from a trustee-managed wallet to Bitbank’s hot wallet, further unsettling the market.

On-chain tracking from Arkham reveals that the US, UK, and German governments hold a total of 17.43 billion USD in Bitcoin. Additionally, Mt. Gox’s repayment obligations amount to 142,000 BTC, equivalent to 8.09 billion US dollars. These massive holdings are expected to be liquidated over time, adding to the market’s selling pressure.

Joe Barnett, a former analyst at Blockware Solutions and now Senior Product Marketing Manager at Unchained, suggested that the German government’s potential sale of around 50,000 BTC could mark a market bottom. He indicated that announcing such large sales could trigger a reflexive feedback loop, where selling pressure intensifies further selling.

Rachel Lin, CEO of the decentralized derivatives exchange SynFutures, forecasts that the selling pressure will continue in the coming days, primarily due to the anticipated large sales from Mt. Gox. However, if the actual sell-offs are smaller than expected, a market recovery could ensue. Lin also mentioned that if selling is primarily aimed at depressing prices, Bitcoin could stabilize around $50,000.

Jacob King, a financial analyst at WhaleWire, expressed concerns about the impact of Mt. Gox repayments, predicting that a significant portion of the Bitcoin will be sold. He warned that the low demand could push Bitcoin into a severe bear market, though he acknowledged that long-term investors might continue to hold in anticipation of future gains.

Bitcoin, which was valued at $320.19 when Mt. Gox went bankrupt in 2014, has since seen its price multiply over 170 times. With the advent of Bitcoin ETFs in the United States and increasing institutional interest, the market dynamics remain complex. Moreover, the upcoming U.S. presidential elections, where pro-cryptocurrency figures like former President Trump are contenders, could further influence investor behavior.

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AnnJoy Makena
AnnJoy Makenahttps://www.ethnews.com
Annjoy Makena is an accomplished and passionate writer who specializes in the fascinating world of cryptocurrencies. With a profound understanding of blockchain technology and its implications, she is dedicated to demystifying complex concepts and delivering valuable insights to her readers. Business Email: [email protected] Phone: +49 160 92211628