- 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.
- 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.
Tether Market Cap Rises Following Stablecoin Meltdown
The market capitalization of the popular stablecoin tether (USDT) has risen following a meltdown in other major stablecoins. As a result of this increase in marketshare for tether, its current market cap is now at $73 billion – almost double that of USDC which is currently at $39 billion. This surge comes after news broke that Circle’s USDC had lost its peg due to an issue with Silicon Valley Bank.
Impact on Other Stablecoins
This development has caused other major stablecoins such as Binance USD (BUSD) and MakerDAO’s Dai to lose some marketshare. Since 2020, BUSD’s market cap has halved to around $8 billion while USDC has dropped 11%. On the other hand, Tether’s share of the market continues to grow and is likely to remain ahead in terms of overall trading volume.
Reaction from Trading Firms
Firms such as Floating Point Group have reported that many customers chose to move funds from USDC into USDT when news broke about Circle’s exposure to SVB. Kevin March – co-founder of Floating Point Group also commented on this situation saying “Many of our customers chose to do the same, putting a lot of sell pressure on the USDC-USDT trading pair”.
Safety Benefits for Tether?It could be argued that one factor behind Tether’s success during this period is due to its status as one of least regulated and most opaque stablecoins available – something which may make it appear ‘safer’ than more transparent alternatives such as USDC or Dai. Steven Kelly – researcher at Yale University made similar comments saying “We don’t really know as much about tether, and it just seems safer for that reason alone.”
< h2 >Can Tether Maintain Its Lead? h2 >It remains unclear whether or not Tether can maintain its lead moving forward but given its current performance it seems likely that it will stay ahead in terms of overall trading volume compared with other major competitors.