The Rise of USDT and the Latest Stable Coin Trends

04/08/2023 02:40 • Blockchain Briefs • 83 views

According to reports, according to the latest data from blockchain analysis company Glassnode, the supply of USDT has continued to rise since the FTX crash (reaching over $80 billion at the time of writing), currently accounting for 63.7% of stable currency capital. Meanwhile, the second ranked stable currency, USDC, has seen a net redemption of $10 billion (-23%) since it briefly decoupled from the US dollar during the bankruptcy of Silicon Valley Bank last month. Similarly, after the news of Paxos ceasing to issue BUSDs in February spread, many investors redeemed BUSDs or converted them into other assets, resulting in a decrease of -52% in the total supply of BUSDs, falling to the $7 billion range.

Data: USDT accounts for 63.7% of the total capital of stable currency

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Introduction

Stablecoins have emerged as an alternative to volatile cryptocurrencies, backed by assets such as fiat currencies, precious metals, or cryptocurrencies themselves. Tether (USDT), the first stablecoin, was created in 2014 and has since become the most widely used stablecoin in the world. In this article, we will discuss the latest trends in stablecoin supply, with a focus on the rise of USDT and the decline of rival stablecoins USDC and BUSD.

The Rise of USDT

According to Glassnode, the supply of USDT has been on the rise since the FTX crash, reaching over $80 billion at the time of writing. USDT currently accounts for 63.7% of the stable currency capital, making it the most dominant stablecoin in the market. The rise in USDT can be attributed to its popularity among traders and investors seeking low volatility and stable returns.

USDC: A Brief Decoupling

USDC, the second-ranked stablecoin, experienced a net redemption of $10 billion (-23%) in the aftermath of the Silicon Valley Bank bankruptcy last month. Investors lost confidence in USDC after it briefly decoupled from the US dollar, causing many to withdraw or convert their USDC into other assets. This setback has proven difficult for USDC, and it remains to be seen if and when it will regain its position as a leading stablecoin.

The Decline of BUSD

Paxos, the issuer of BUSD, announced its decision to cease issuing new tokens in February. The news prompted many investors to redeem or convert their BUSD holdings, leading to a -52% decrease in its total supply, which now stands in the $7 billion range. BUSD has since struggled to regain its position in the market, with many investors opting for other stablecoins instead.

Conclusion

Despite the recent setbacks for USDC and BUSD, stablecoins as a whole continue to grow in popularity as a reliable alternative to volatile cryptocurrencies. USDT’s dominance in the market should not come as a surprise, given its strong track record and widespread adoption among traders and investors worldwide.

FAQs

1. What is a stablecoin?

A stablecoin is a type of cryptocurrency that is backed by an underlying asset, such as fiat currency, precious metals, or other cryptocurrencies. Stablecoins aim to provide stability and low volatility, making them a popular choice among traders and investors.

2. Why is USDT so popular among traders and investors?

USDT’s popularity can be attributed to its strong track record and widespread adoption. The stablecoin has been around since 2014 and has proven to be a reliable alternative to volatile cryptocurrencies. Many traders and investors prefer USDT’s low volatility and stable returns.

3. Will USDC and BUSD be able to recover from their recent setbacks?

It remains to be seen if and when USDC and BUSD will recover from their recent setbacks. USDC’s brief decoupling from the US dollar has shaken investor confidence, while BUSD’s decrease in supply has made it less appealing to investors. Both stablecoins will need to regain investors’ trust if they hope to regain their position in the market.

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