Data shows the top stablecoin USDT has lost some dominance following the collapse of UST. While other coins like USDC and BUSD have observed rather sharp growth.
USDT Has Shed Around $10 Billion Reserves After UST’s Collapse
A stablecoin is a token whose value is pegged to another currency or commodity. The most popular such coins follow the USD, meaning their price normally remains fixed at a value of $1 (hence the name “stable” coin).
The much talked about LUNA collapse earlier in the month lead to the depegging of one such stablecoin, the UST.
TerraUSD was one of the biggest stablecoins on the market, even breaking into the top ten crypto list during the start of this month. So it’s not surprising that the collapse of such a coin shook the entire crypto market.
One of the aftereffects was USDT observing a smaller magnitude de-peg event itself. As fear spread in the market, investors rushed to redeem their Tether.
During this decoupling, the coin’s price fell down to as low as $0.97. It wasn’t long, however, before Tether came back closer to $1 once again.
Since the UST event, Tether USD has lost around $10 billion from its cap in total, delivering a hit to the number one stablecoin’s dominance.
The below chart from the latest weekly Arcane Research report shows the trend in the market cap of the top stablecoins over the course of the year so far.
It looks like USDT has lost 6.5% in market cap since the start of the year | Source: Arcane Research's The Weekly Update - Week 20, 2022
As you can see in the above graph, the market caps of BUSD and USDC have recently observed sharp increases, taking the year-to-date gains to 28% and 26%, respectively.
On the other hand, USDT has rather lost market cap since the start of the year as its returns stand at 6.5% in the red.
Such a trend may be a sign that the market is now shifting more towards other stablecoins like USDC and BUSD, with Tether no longer being the sole preferred USD crypto.
At the time of writing, Bitcoin’s price floats around $29.3k, down 1% in the last seven days. Over the past month, the crypto has lost 25% in value.
Here is a chart that shows the trend in the price of the coin over the last five days.
Seems like the price of the coin has been consolidating sideways over the past few days | Source: BTCUSD on TradingView
A couple of days back it looked like Bitcoin was making ground above the $30k level, but since then the coin has already slumped back below the mark.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research