Crypto rallies point to slower USDC growth and faster USDT growth, study finds
Coin Metrics research finds that USDC and USDT supply growth responds differently to market conditions, so combined issuance should not be treated as a single pool of cash ready to buy Bitcoin. Stronger crypto returns are associated with slower subsequent USDC growth but faster USDT growth; funding rates relate to growth in both, while Aave lending yields add explanatory value for USDC only. The models explain just 13% of USDC and 16% of USDT weekly supply-growth variation, and do not establish causation or predict Bitcoin returns. Stablecoins may serve collateral, lending, payments, or dollar-holding purposes, while existing tokens can change hands without new issuance. Even exchange reserves indicate potential liquidity rather than completed Bitcoin purchases.
