• The market capitalization of the popular stablecoin tether (USDT) has risen while other stablecoins, including Circle’s USD coin (USDC) and MakerDAO’s DAI briefly lost their pegs over the weekend.
• Binance USD (BUSD), a stablecoin issued by US-based Paxos Trust Company for Binance, USD coin, and other major stablecoins have seen their share of the stablecoin market go down.
• Tether’s market cap has risen 10% this year to $73 billion, making it almost twice as large as USDC, the second-largest stablecoin in the market.
Stablecoin Market Cap Fluctuations
The market capitalization of the popular stablecoin tether (USDT) has risen as other stablecoins, including Circle’s USD coin (USDC) and MakerDAO’s DAI briefly lost their pegs over the weekend. As a result of the increase in marketshare for tether, Binance USD (BUSD), a stablecoin issued by US-based Paxos Trust Company for Binance, USD coin, and other major stablecoins have seen their share of the stablecoin market go down. So far in 2023, BUSD has lost almost half of its market cap to come in at around $8 billion, while USDC has fallen 11% to $39 billion. Tether’s market cap on the other hand has risen 10% this year to $73 billion making it almost twice as large as USDC which is currently standing at $39 billion.
Circle Loses Its Peg
The latest surge in tether’s marketcap comes after its main competitor USDC this weekend lost its peg due to news that Circle had deposited $3.3 billion out of $40 billion in reserves for USDC into Silicon Valley Bank (SVB). SVB collapsed on March 10th but was later saved when the U.S Government guaranteed that all depositors would regain access to their money which allowed USDC to trade back up to it’s original pegged price of 1$.
Market Players Move Funds from USDC To USDT
Commenting on this situation Kevin March co-founder of trading firm Floating Point Group said his firm was amongst many who moved funds from USDC to USDT when de-peg happened “Many of our customers chose to do same putting alot sell pressure on usdc – usdt trading pair” he said .
It could be tethers status as one least regulated & least transparent that is now working in its favor according researcher Steven Kelly from Yale University’s financial stability program he said “We don’t really know much about tether & it just seems safer for that reason alone”
Can Tether Maintain Lead?
Whether or not tether can maintain its lead is yet unclear however what we do know is that with so much uncertainty with different coins & banking institutions being increasingly vulnerable it looks like people are going towards more unregulated options such as tether which makes sense given current climate .
The recent events where Circle temporarily de-pegged along with increasing demand for an unregulated option like Tether shows how uncertain things remain within crypto world despite governments best efforts . With so many unknowns still looming , it will be interesting how future plays out between different coins & banking institutions .