Traders Shift From USDT To USDC Due To These Metrics! What Next ?

stablecoin

Last week as the Terra blockchain collapsed, the turbulence was felt by the whole cryptocurrency market as the major cryptocurrencies collapsed to its lowest level of 2022.

In one week, more than $30 billion worth of stablecoins were redeemed as TerraUSD (UST) unstuck with a temporary dip in Tether (USDT). Surprisingly, USD Coin, or USDC, is the only stablecoin benefiting from volatility.

Since May 11th, the USDC market cap has spiked by more than 10% from $48 billion to $53 billion. Over the last two weeks UST and USDT saw minting of more than 10 billion coins.

USDC steps into the spotlight

Secured stablecoins, Tether (USDT) and USD Coin (USDC) are the tokens whose issuance is backed by a reserve of US dollars and equivalent dollar assets.

Terra’s algorithmic stablecoin, UST, was de-pegged to the US dollar on May 9 resulting in significant crypto market sell-offs and stablecoin redemptions.

Then, on May 12, Tether’s stablecoin USDT was hit by a downtrend that saw a drop towards $0.95 and lost its peg.

On the other hand, there was a rise in the USDC’s market cap because the traders started leaning towards USDC rather than USDT. Though the Tethere community is doing its best to support USDT, the stablecoin is still trading below $1.

Santiment’s statistics on the USDC and USDT markets reveal how USDC has benefited from the decline in USDT. USDT redemptions continue to this day. Meanwhile, compared to other stablecoins, USDC transactions have increased significantly.

Meanwhile, USDC’s whale accumulation has also increased as the FUD started raising with USDT & UST de-pegging. Additionally, at present, the USDC stablecoin is one of the top purchased token accumulation seen by 500 biggest ETH whales over the last 24hrs.

Three metrics pointing to a key stablecoin trend.

  • Transactions

According to data from Santiment, an analytics firm, the shift from USDT to USDC was observed after Tether’s market cap fell while USDC’s market cap rose.

  • Growth in Network

When the first signs of UST de-pegging appeared, retail users began converting as much UST as they could into the industry’s two most popular stablecoins,  USDT or USDC.

  • Supply Distribution

Amid the UST crash, the growth of the USDT network accelerated. Santiment also points out that the distribution of supply by number of addresses shows that many wallets may have completely abandoned USDT. On the USDC side, the opposite happened.

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