Following the collapse of Silicon Valley Bank, investors filled their wallets with USDC (USDC) and funds moved from centralized exchanges (CEX) to decentralized exchanges (DEX).
Outflows from centralized exchanges often increase when markets are in turmoil, blockchain analytics firm Chainalysis said in a March 16 blog post, as users are likely to worry about losing their funds when exchanges fall.
Chainalysis data shows that hourly outflows from CEXs to DEXs rose to more than $300 million on March 11, shortly after SVB was shut down by the California regulator.
A similar phenomenon was observed during the collapse of the cryptocurrency exchange FTX last year, when it was feared that the contagion could spread to other crypto companies.
However, data from blockchain analytics platform Token Terminal suggests that the spike in daily trading volumes for major DEXs was short-lived in both cases.
USDC was identified as one of the main assets moved to DEX, which according to Chainalysis was not surprising given that USDC broke up after stablecoin issuer Circle announced that it had $3.3 billion in SVB, prompting many CEX: t, such as Coinbase, to temporarily suspend USDC trading.
Related: Circle clears “substantially all” of USDC minting and redemptions
What was surprising, Chainalysis noted, was the increase in USDC acquisitions on major DEXs such as Curve3pool and Uniswap. “Several assets experienced large spikes in user acquisition, but none more so than USDC,” the blockchain analytics firm wrote.
Chain analysis theorized that this was due to confidence in the stablecoin, as some crypto users loaded up USDC when it was relatively cheap, betting it would get back its mortgage — which it did on March 13, according to CoinMarketCap.