Rising Bitcoin Volatility Drives Stablecoin Hedging Demand

USDC and Tether-issued USDT are dollar-pegged stablecoins commonly used by crypto investors as cash holdings. The Federal Reserve played down the prospect of near-term interest-rate cuts, while conflict involving the United States, Israel and Iran increased pressure from energy prices and demand for safe havens. Funds consequently shifted from Bitcoin into dollar tokens, indicating that liquidity remains in the market but has yet to move into risk assets.

CryptoQuant data showed that USDC transfer volume reached $368 billion on March 22, 2026, up about 2,081% in a single day, while USDT volume on Ethereum hit $72 billion, bringing the combined total to $440 billion. Bitcoin fell as much as 3.75% to $67,300 that day before rebounding above $71,700 the following day. Futures open interest declined by $19 billion over six months, reflecting investor deleveraging and a willingness to wait for a pullback.