The stablecoin ecosystem has also been impacted by America’s war on crypto, with a clear divergence happening between the top two issuers.
Tether supply has reached an all-time high of 83.36 billion USDT, according to the firm’s transparency report. Industry analyst Will Clemente commented:
What was once a competitive advantage for USDC is now the opposite,” he added.
Tether in circulation just reached an ATH of $83.35 billion
The divergence from USDC is striking, reflecting easier access to treasuries for US-based USDC holders & regulatory uncertainty for US-based Circle. What was once a competitive advantage for USDC is now the opposite. pic.twitter.com/OcExkpZqAW
— Will Clemente (@WClementeIII) June 11, 2023
Tether Keeps Minting
Circle’s USDC was once favored by institutions, but with an ongoing industry-wide crackdown, the demand for the stablecoin is dwindling.
Furthermore, Circle was heavily impacted by exposure to the now-bankrupt Silicon Valley Bank. USDC de-pegged at the time in early March, causing a massive loss in confidence.
USDC supply has declined by almost 50% since June 2022, when it peaked at around $56 billion. As a result, its market share has also taken a hit, tanking to 22%, whilst Tether’s has increased to a commanding 64.5%.
The total stablecoin market capitalization is currently $129.3 billion, according to CoinGecko. It represents almost 12% of the entire cryptocurrency market capitalization though it, too, has shrunk considerably during the bear market.
View metric:https://t.co/D90kNIpU2J pic.twitter.com/2XsLdprSgx
— glassnode alerts (@glassnodealerts) June 11, 2023
The flight to safety from exchanges, especially Binance, has increased following the SEC’s twin lawsuits and enforcement action last week.
However, Binance CEO Changpeng Zhao cautioned investors not to read too much into Binance outflow figures from analytics platforms because they use TVL (total value locked), which includes decreases in crypto asset prices.
Crypto Market Outlook
Crypto markets have calmed over the weekend as the consolidation continues. There has been virtually no change in total capitalization over the past 24 hours, as it remains at $1.09 trillion.
BTC prices have held steady at $25,800, while Ethereum has dipped marginally to $1,735 at the time of writing.
Unsurprisingly, BNB has been hit the hardest, having lost 25% over the past week. Binance Coin was trading at its lowest price this year at $222, having dropped another 5% at the time of writing.
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