For a long time, Tether has been the biggest stablecoin in the market. Its market cap has sent it among the top 10 crypto assets. The importance of Tether also became even more underscored with the fall of Terra’s UST. But USDC, another major stablecoin is starting to make some progress. In fact, data shows that it could replace Tether despite growing skepticism about it. Here are some important points:
The total supply of USDC has been growing month after month
USDC has also seen a 1000% jump in its market cap since January
USDT on the other hand saw the largest number of redemptions in May
Data Source: TradingView
Is USDC taking over?
Well, so far, USDC has not yet reached the same level as Tether. But it seems the fall of UST has accelerated the adoption of USDC in a huge way. Take this for example. At the start of the year, USDC had a market cap of around $4.1 billion. Today, the stablecoin has a market cap of above $55 billion. It’s almost 10 times higher than it was.
Also, as USDC reported this growth, USDT on the other hand saw record numbers of redemptions over the past few weeks. In fact, redemptions for USDT hit -$13 billion in May alone. Now, these signs indicate that investor appetite for USDC is rising. If this trend continues, the coin will be much closer to USDT by the end of the year.
Are there risks of USDC de-pegging?
When Terra’s UST de-pegged from the dollar, it was largely the beginning of the end for the stablecoin. There are also fears that other dollar-pegged coins including USDC could follow the same fate.
However, right now we do not see any immediate risks of USDC de-pegging. As a matter of fact, even during the most difficult months in crypto, USDC has maintained its peg quite impressively.