Traders Shift From USDT To USDC Due To These Metrics! What Next ?
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 a week, more than $30 billion in top stablecoins were redeemed as the TerraUSD (UST) de-pegged along with a temporary drop in Tether (USDT). Surprisingly, USD Coin, or USDC, is the only stablecoin benefiting from the 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 Gets Into Spotlight
The collateralized stablecoins, Tether (USDT) and USD Coin (USDC) are the tokens whose issuance is backed by a reserve of US dollars and dollar-equivalent 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 USDT stablecoin was hit by a bearish trend that saw a decline 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 reveals how the USDC has benefited from the USDT’s decline. The redemptions of USDT are still continuing till this day. Meanwhile, as compared to other stablecoins, USDC transactions have surged dramatically.
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 Towards Key Trend On Stablecoins.
As per data from Santiment, an analytic firm, the shift from USDT to USDC was seen after Tether’s USDT market cap dropped 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
In the midst of the UST crash, USDT network growth accelerated. Also the Santiment firm points out that supply distribution by number of addresses shows that many wallets may have abandoned USDT entirely. On the USDC side, the opposite happened.
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