How did crypto returns relate to USDC and USDT growth?

Stronger non-stablecoin crypto returns were associated with slower USDC growth and faster USDT growth the following week.

How much of weekly stablecoin supply variation did the models explain?

The lagged issuer models explained about 13% of USDC and 16% of USDT weekly supply-growth variation. None of the study’s models explained more than 25%.

What did Aave lending carry add to the analysis?

The spread between Aave v3 lending yield and a three-month Treasury yield added significant explanatory information for USDC, but not for USDT or combined supply beyond funding.

Why does stablecoin issuance not prove that investors are buying Bitcoin?

Stablecoins can serve lending, collateral, payments or dollar-holding needs. New issuance does not identify the token’s destination or establish that a Bitcoin trade followed.

Does an exchange stablecoin deposit confirm a Bitcoin purchase?

No. An exchange balance is closer to a trading location than total circulation, but a deposit remains an intermediate step rather than a completed Bitcoin purchase.

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CryptoSlate

USDC and USDT Growth Diverge After Crypto Returns

Coin Metrics says the models explain less than 25% of weekly supply variation, underscoring why stablecoin issuance alone is not a measure of Bitcoin buying.

Zipp Editorial Aggregated from CryptoSlate

USDC and USDT Growth Diverge After Crypto Returns

Coin Metrics found that stronger non-stablecoin crypto returns are associated with slower USDC growth and faster USDT growth the following week. Its four-year weekly analysis also links higher perpetual-futures funding rates with faster supply growth for both tokens.

The issuer models explain about 13% of weekly USDC supply-growth variation and 16% for USDT. Aave v3 lending carry adds explanatory information for USDC, but none of the study’s models explains more than 25% of weekly supply variation.

For Bitcoin investors, combined stablecoin supply is not necessarily cash waiting to buy BTC. Dollar tokens can support lending, collateral, payments or holding dollars, and existing tokens can change hands without new issuance. Exchange reserves indicate a trading location, but a deposit alone does not establish a Bitcoin purchase.

$USDC #USDT #BitcoinLiquidity #Stablecoins

Frequently asked questions

How did crypto returns relate to USDC and USDT growth?

Stronger non-stablecoin crypto returns were associated with slower USDC growth and faster USDT growth the following week.
How much of weekly stablecoin supply variation did the models explain?

The lagged issuer models explained about 13% of USDC and 16% of USDT weekly supply-growth variation. None of the study’s models explained more than 25%.
What did Aave lending carry add to the analysis?

The spread between Aave v3 lending yield and a three-month Treasury yield added significant explanatory information for USDC, but not for USDT or combined supply beyond funding.
Why does stablecoin issuance not prove that investors are buying Bitcoin?

Stablecoins can serve lending, collateral, payments or dollar-holding needs. New issuance does not identify the token’s destination or establish that a Bitcoin trade followed.
Does an exchange stablecoin deposit confirm a Bitcoin purchase?

No. An exchange balance is closer to a trading location than total circulation, but a deposit remains an intermediate step rather than a completed Bitcoin purchase.

Source attribution

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