USDT Market Share in Stablecoins Soars to 60% as USDC Suffers $10 Billion Outflow Following Silicon Valley Bankruptcy
The stablecoin market has been experiencing significant changes, with Tether (USDT) taking the lead while USD Coin (USDC) struggles to regain market confidence.
According to CoinGecko, USDC experienced a net outflow of $10 billion in the past 10 days, prompting a decline in its market cap from $43 billion to $33 billion. Circle, the operator of USDC, announced that the crisis was due to a liquidity problem in Silicon Valley banks, which held $3.3 billion of the coin’s reserves.
Despite Circle’s reassurances that USDC is backed by short-term Treasuries and deposits in various US banks, it will be challenging to regain market trust. Moreover, a recent report from digital asset broker Enigma Securities suggested that while USDC may have survived the crisis, it’s unclear whether it will ultimately win the war.
Meanwhile, Tether’s market share has surged to 60%, with a market capitalization of $79.5 billion. The coin’s value remained stable during the banking crisis, which helped boost its popularity among investors. The decline of third-ranked stablecoin Binance USD (BUSD) also contributed to Tether’s rise to the top spot, with BUSD’s supply falling below $8 billion from $16 billion in early February.
TUSD, highlighted by Binance as an alternative to BUSD, rose from less than $1 billion to $2 billion, rising to the fifth spot. Circle CEO Jeremy Allaire expressed irony over the fact that USDC, which is known for integrating US banking and regulation, is now considered “unsafe,” while Tether lacks banking and risk exposure information.
Paolo Ardoino, Tether’s Chief Technology Officer, expressed confidence in USDT’s excess reserves, which amount to $1.6 billion, and the coin’s profitability, with $700 million in recorded profits in the first quarter of 2023.
In conclusion, the stablecoin market is in flux, with Tether leading the way while USDC struggles to regain market trust. It remains to be seen how the stablecoin market will evolve in the coming months, but for now, Tether is the undisputed leader.
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