When Terra’s UST lost its 1:1 dollar peg in May, it was one of the most alarming developments in the stablecoin market. The de-peg caused chaos and completely damaged Terra’s credibility. The USDT and USDC did, however, escape the massacre.
However, a number other stablecoins are working hard to fill the gap left by it. This research indicates that the USD coin (USDC) is in the lead. By market capitalization, USDT is now in third place, while USDC is immediately behind it in fourth place.
USDC Will Unseated USDT
According to information made public by Arcane Research, the market value of UDSC is presently above $54.8 billion. A decrease of 1.6 percent was noted during the previous 30 days. The market capitalisation of USDT is greater than $65.6 billion. It has also dropped by 1.5 percent during the same time period.
The stablecoin bubble had been growing for some time, according to Arcane. For the first four months of 2022, this worked nicely before a sharp trend reversal shook the market.
The USDC can overtake the USDT based on the mentioned growth rates. While the growth rate of USDT has fallen by 28.7%, that of USDC increased by 70.4 percent.
If the current rate maintains, the USD currency will surpass Tether as the biggest stablecoin on October 10, 2022. The value of the USDC market will top 61.3 billion.
At the beginning of 2022, Tether had a 47.5 percent market share. USDC, on the other hand, had 25.8%. After the first half of 2022, Tether’s dominance, however, fell to 43.8 percent while USDC’s increased to 36.3 percent.
The Fall of USDT is Near
Arcane highlights a number of important factors that USDC would need to meet in order to defeat Tether, but there are still other factors to consider.
First of all, Tether has come under fire for being opaque about its investments and reserves. The audits conducted by Tether are also inconsistent. The placements of Tether are further complicated by these elements.
While USDC is routinely audited, it is more transparent about its reserves. As a result, it is much easier for investors to trust in the currency, which is quite advantageous. Center, which is a collaboration between Circle, Coinbase, and Bitmain and is the parent company of USDC, carries out monthly audits.
Regulating stablecoins is something that several nations are presently exploring. Therefore, it seems natural that the currency that has the greatest audits and openness will also be the one that has the most users.
But because USDC is more centrally located, it is more top-controlled. While tracking USDT requires information from the blockchain. Even Nevertheless, it seems as though USDC will win the stablecoin arms race.