Crypto market crash last week cryptocurrency industry, and stablecoins also saw volatility. TerraUSD (UST) de-peg and in Tether (USDT) The short-lived decline resulted in more than $30 billion in value in the largest stablecoins in a week.
Interestingly, Circle is the only stablecoin that survived the surge. USD Coin (USDC) recorded as.
USDC’s market cap has jumped from $48 billion to $53 billion, an increase of more than 10% since May 11. The decline in other stablecoins has led Circle to mint more than 10 billion coins in the last two weeks.
USDC Becomes Preferred Stablecoin Over Tether (USDT)
Tether (USDT) and USD Coin (USDC) operate as collateralized stablecoins that rely on a reserve of US dollars and dollar equivalents to support their supply. On May 9, Terra’s algorithmic stablecoin UST lost its peg to the US dollar. This led to massive sales in the crypto market and re-depreciation of stablecoins.
On May 12, Tether’s USDT stablecoin dropped to $0.95, losing its peg to the dollar despite being a collateralized stablecoin. This caused great damage and other stablecoins along with USDT started to lose their market value.
Simultaneously, the market cap of USD Coin started to rise as investors switched from the largest stablecoin USDT to USDC. USDT is still trading slightly below $1 despite the great effort of the Tether team.
Data provided by Santiment shows how USDC is benefiting from the decline in USDT. The market value loss in USDT still continues. However, USDC transactions have increased significantly compared to other stablecoins.
*Not an investor recommendation.