[DigitalToday reporter Yoonseo Lee (이윤서)] An analysis says supply flows for USDC and USDT are moving in opposite directions as the cryptocurrency market rebounds.

CryptoSlate, a blockchain media outlet, reported on Oct. 21 that on-chain analytics firm Coin Metrics analysed USDC and USDT as showing different reactions to cryptocurrency returns. It also said limits have emerged in the existing approach of judging new bitcoin demand by combining issuance of the two assets.

The key point is that it is difficult to track market fund flows using only total stablecoin issuance. According to Coin Metrics, USDC and USDT issuance each showed an opposite relationship with past returns for cryptocurrencies excluding stablecoins. That means even if cryptocurrency prices rise, supply of the two assets does not necessarily increase in the same direction or at the same pace.

Coin Metrics said it is hard to judge new demand for bitcoin using only an indicator that combines issuance of the two assets. Even if total supply increases, the meaning can differ depending on which stablecoin led the rise, it said. It added that a combined figure alone makes it difficult to distinguish the nature of funds and the direction of inflows.

It said treating USDC and USDT as the same leading indicator could miss differences depending on the market phase. Since issuance of the two assets showed an opposite relationship with past cryptocurrency returns, it is difficult to interpret supply changes uniformly as a signal of a return in appetite for risk assets. Factors other than price moves, including trading structures and fund transfer routes, can affect increases and decreases in each stablecoin, it said.

During this rebound phase, growth in the two assets also diverged. As bitcoin and major cryptocurrency prices rebounded, USDC growth slowed, while USDT increased faster. The analysis said this supports the view that stablecoin supply is difficult to use as a single indicator for price forecasting. Looking only at the overall supply growth rate can obscure such differing trends in a single number.

It said the analysis does not focus on pointing to specific regulatory changes or individual events as causes. The key is that stablecoin-by-stablecoin supply trends differed even during the same rebound phase. It said there is a need to distinguish which asset's supply rose or fell along with changes in total issuance, and how those shifts appeared before and after the price rebound.

The key going forward is what relationship supply changes in USDC and USDT will maintain with bitcoin's price trend. Coin Metrics noted that USDC's slow growth and USDT's rapid growth appeared alongside this cryptocurrency rebound. It added that the fact such a relationship was observed does not by itself allow a definitive conclusion that new buying funds have flowed into bitcoin, and that interpretations should distinguish stablecoin-specific supply changes from actual demand.