USDC switch quantity hit 5X USDT’s in fallout from FTX collapse

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Stablecoin USD Coin (USDC) has grown in recognition because the collapse of FTX and now steadily reaches each day switch volumes 4 to 5 occasions that recorded by main competitor Tether (USDT) in response to information from blockchain analytics agency Glassnode.

That’s regardless of the market cap of USDT being $23 billion larger than USDC. As of Jan. 10, the distinction was in USDC’s favor by a margin of 4 and a half occasions.

Each stablecoins recorded surges in switch volumes following an infamous tweet from Binance CEO Changpeng Zhao on Nov. 6 saying Binance would liquidate its whole FTX Token (FTT) holdings. FTX went into chapter 11 quickly after.

Since then, USDC has been the preferred choice for crypto users averaging over $12.5 billion extra in switch quantity in comparison with USDT per day in response to Glassnode information.

Whole switch volumes for USDC (In blue) and USDT (In inexperienced) from Oct. 8 to Jan. 10. Supply: Glassnode.

Whereas every of the stablecoins is designed to commerce as shut to at least one U.S. greenback as potential and is backed by reserves held by its issuers, USDC is regarded by some within the crypto neighborhood as a doubtlessly safer possibility.

Supporters level to USDC’s property, that are backed by money or short-term U.S. treasuries and its month-to-month audits by world accounting agency Grant Thornton.

Tether has confronted criticism over a variety of years for not offering a correct audit and for being much less clear about its reserves.

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The corporate behind USDT was fined $41 million in Oct. 2021 by the Commodity Futures Buying and selling Fee, which accused it of solely holding adequate reserves 27.6% of the time between 2016 and 2018 regardless of claiming its tokens were fully backed by fiat currencies.

Tether has been lowering the commercial paper backing its issued tokens in favor of safer options, with the newest asset breakdown on Nov. 10 exhibiting that almost $46 billion of its reserves consist of money, financial institution deposits and U.S. treasuries.

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USDT briefly misplaced its peg to the U.S. greenback following the FTX collapse amid fears it was uncovered to Alameda Analysis and FTX, which Tether denied.

On-chain proof suggests the 2 companies have been attempting to short the stablecoin.

USDT had been recording switch volumes a lot greater than USDCs up till Could 2021, after Tether had increased the supply of the token from $8.79 billion to $61.82 billion during the last yr, representing a rise of 603%.

Market cap of USDT from Could 2018 to Jan. 2022. Supply: TradingView

Regardless of the following change in client preferences, Tether had referred to the expansion in market capitalization as an indication of “the market’s continued belief and confidence in Tether,” and famous each token could be redeemed for U.S. {dollars} on a 1:1 foundation.