bitcoin's dollar-denominated price on coinbase trades at a significant premium to prices on other exchanges, including binance. The premium stems from the discount in the dollar-pegged stablecoin $USDC. godbole17 reports
Data tracked by analytics firm CryptoQuant shows bitcoin's Coinbase Premium Index – which measures the spread between BTC's U.S. dollar-denominated price on U.S.-based Coinbase and BTC's tether-denominated price on offshore giant Binance – rose to 0.8, the highest since March 2020.to represent stronger buying pressure from stateside institutions and sophisticated traders.
This time, however, the premium likely represents the discount or flight from USDC. Bitcoin's price on Coinbase became sensitive to USDC volatility since the exchange in July last year merged its order book – consisting of USDC as the base currency – with the USD order book . Supporting the argument that bitcoin's current dollar-denominated price on Coinbase stems from the USDC discount is the fact that the BTC/USDT pair on Coinbase trades pretty much in line with prices on other offshore exchanges.
"Because USDC is trading below its peg, BTC appears more expensive on Coinbase," pseudonymous DeFi researcher Ignas told CoinDesk."Therefore, the spot market for BTC needs to be adjusted to reflect the current USDC price." USDC fell as low as $0.90 late Friday, deviating from its 1:1 dollar peg after its issuer, Circle Internet Financial,
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