Market makers have sent stablecoins to exchanges, increasing liquidity by around $100M. The inflows coincided with a slide in crypto prices, where BTC moved down to the $60,000 range.
Market maker wallets are moving stablecoins to exchanges. Stablecoin inflows may signal new buying opportunities, as crypto prices once again took a step back. In the past few days, the largest market makers topped up their exchange wallets with the potential to affect the market.
Wintermute deposited a total of 42M USDT in the past day, with regular deposits every few hours. The market maker has prepared all of its USDT, and has a small amount of remaining USDC.
The second-biggest depositor was Flow Traders, depositing $34.12M, while withdrawing Bitcoin (BTC). Animoca Brands took out $16.57M USDT out of its wallets, and Carrot_BTC, a known whale, added another $6.9M USDC.
The deposits happened during a week where exchange flows for stablecoins are negative. The past seven-day period saw net negative flows of $316.86M. The recent deposits are part of the trend reversal, where stablecoins return to exchanges and signal buying pressure. Stablecoin reserves on exchanges as a whole remain at $26.13B, with unaccounted reserves on decentralized exchanges and in various yield and lending vaults.
A significant part of the stablecoin supply has moved onto L2 protocols, and some of that liquidity remains fragmented and harder to trace. In total, stablecoins on L2 protocols exceeded $10B in value, with a mix of USDT, USDC and other crypto-backed tokens. Those stablecoins are mostly used on decentralized apps or for meme token trading.
Stablecoin volumes grow from USDT, USDC inflows
The inflows come at a time when stablecoin volumes are slightly higher, at $55B in total for USDT and USDC, the most widely used assets. There is no way to check if the buying has already started, or if the market makers are waiting for a bigger dip.
USDT and USDC were the stablecoins with the biggest net inflows in the past month. Other stablecoins like DAI have bigger shifts in their supply, due to the almost constant generation and burns. USDT increased its supply by a net 792M tokens.
USDC was a leader in new growth, boosted by minting more stablecoins on Base. In the past 30 days, USDC had a net increase of $959.4M.
USDC had the biggest net inflows of nearly $1B in a month, followed by new USDT printing. | Source: Artemis
Some of the inflows to Binance may also be linked to the new Launchpad program for Scroll ZKP tokens. The new L2 will award 5.5% of its SCR token supply to participants in the Scroll launchpad, and large-scale whales will benefit the most from this last airdrop farming event.
The inflows happen at a time when the overall supply of stablecoins is rising. Tether (USDT) expanded its supply from 118.3B up to 119.7B, with almost no token burns. However, the presence of USDT is not always active on the market. Some of the stablecoins remain idle, or are used within lending protocols, DEX or other DeFi features.
The inflows also coincide with recent profit-taking from BTC, where even large whales sell some of their positions and absorb losses.
FDUSD also flows into the market
The whale inflows coincided with rapid activity of FDUSD printing. Binance is the main source of demand for the asset, which can also be deployed in the Binance Launchpad staking.
FDUSD is also related to BTC and other asset rallies, due to its concentrated liquidity. In only two days, the supply of FDUSD expanded from recent lows of $2.8B up to $3.2B in value locked. FDUSD was among the most rapidly expanding stablecoins both within the weekly and the monthly timeframe.
Most of the new FDUSD are in the Gnosis Safe Proxy wallet, but a direct deposit to Binance was also made in the past day, adding more than $12M in available liquidity. The inflows look minor compared to the volumes of other stablecoins. But FDUSD is a highly active asset, with a daily turnover of more than 125% of its supply. This stablecoin may have a disproportionate effect on the market compared to other stablecoins.
The other closely watched stablecoin is GHO by Aave, which added more than 18.3% of its supply in the past month. GHO is already at 159.5M tokens, on track to its 175M goal before being used to buy back AAVE.