The market capitalization of USDC has decreased dramatically as a result of the volatility brought on by the failure of crypto banks over the previous month. Now, every indication has USDT, its challenger, outperforming it.
Net withdrawals of USDC tokens had surpassed $10 billion as of March 6, when authorities shut down Silicon Valley Bank, one of the most important reserve banks.
Despite the fact that USDC has recovered the dollar price peg it lost in the immediate aftermath of SVB's collapse and that US payments company Circle has survived the collapse, the token's market valuation has decreased by 24.5% from its previous $44 billion to $33.2 billion, according to cryptocurrency price tracker CoinGecko.
As this is going on, the BUSD currency on Binance has decreased along with other stablecoins. On March 1st, its market capitalization topped $10 billion. However this amount is only $7.6 billion right now.
Following SVB's collapse on March 10, withdrawals quickened, locking $3.3 billion in cash reserve deposits in Circle's vaults for days until government intervention.
The incident highlighted how fiat-backed stablecoins depend on the stability of well-established financial institutions and plunged the stablecoin market into chaos as USDC and smaller stablecoins briefly lost their price peg.
It is important to note that the market stablecoin issuer Tether's USDT has seen significant growth over this time. The bank's capitalisation has expanded by more than 11% since market instability, from $71.6 billion to $79.6 billion. Recently, USDT has established itself as "the most stablecoin."
A crucial element of the cryptocurrency ecosystem, USDT is frequently used to speed up trading on exchanges. Although its issuer, Tether, has long faced criticism for its reserve assets and lack of transparency, investors don't seem to be as concerned about these issues as they once were.
Tether's chief technology officer, Paolo Ardoino, told CNBC that the stablecoin issuer was on track to generate a $700 million profit in the first quarter of the year and that USDT has about $1.6 billion in surplus reserves.
Another stablecoin, TrueUSD (TUSD), has gained popularity as a result of Binance's promotion of TUSD as a substitute for BUSD and the expansion of commerce with the currency. Its capitalisation has climbed by more than 66% since the start of the month.