In the world of stablecoins, Tether USDT was the king until the crash. Since then, others have fought seriously to take the position. But amid all the striving stablecoins, reports have revealed that USDC might soon take over the its position.
The 2022 crypto market crash left a sour taste for the investors. Even though the Federal Reserve and its interest rate hike started the panic, the crash of Tether UST spiraled the situation out of control.
Stablecoin Pegging
Stablecoins are pegged to US dollars. This implies that one stablecoin equals 1 USD. Many investors prefer to use these coins to hedge against price crashes or volatility. So, instead of leaving their assets in other cryptos, investors prefer to hold them in stablecoins to protect them.
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But suppose an investor holds all his assets in a particular stablecoin, and it depegs from the US dollars, he will lose his funds. That’s what happened with Tether and caused mayhem in the crypto market.
USDC Records Massive Growth
Report shows that USDC has continued to spike in growth for some time now. The stablecoin saw massive increase from January to April 2022 before the market crash in May. In the report, analysts predict it has shown possibilities of becoming number one given its growth trend.
The growth data on the two top contenders, USDT fell by 28.7%, while USDC’s growth rate spiked by 70.4%. Experts believe that if this trend continues, USDC will overtake USDT and enjoy the position of the biggest stablecoin. The predicted date will be October 10, 2022, when the USDC market cap is expected to cross 61.3 billion.
USDT Continues To Lose Grounds to USDC
Before the recent competition for the number position, Tether USDT stood unopposed in the stablecoin market.
Reports show that the coin enjoyed the “first mover advantage.” But unfortunately, the stablecoin lost 50% of its market cap in November 2021 and even fell terribly in 2022. As of then, the market cap was $78 billion, but it’s now at $65.8 billion.
While USDT keeps falling in 2022, USDC saw massive growth. Its market cap of $42.2 billion rose to $55billion, representing a 70% growth in one year. Notably, USDC is more compliant with regulations, which has proven an advantage.
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Regarding the market dominance for both stablecoins, USDT was at 47.5%, while USDC was still at 25.8%. But now, USDT has fallen to 43.8%, while USDC has risen to 36.3%. So, it’s evident that while USDT continues to decline, USDC is recording continuous growth.
Featured Image by Getty Images | Charts by TradingView
