Stablecoins have not been able to escape the cryptocurrency crisis this year, which worsened after the collapse of the FTX exchange. The tokens that maintain their parity against the dollar have also lost confidence among institutional investors.
However, in the last two weeks USD Coin (USDC), the stablecoin issued by the American company Circle Financials Ltd., has been challenging its rival, Tether (USDT), for leadership in the sector.
During this period there has been a sell-off of USDT exceeding $2 billion, according to data from CoinMarketCap. Meanwhile, the USDC supply has grown from $44bn to $44.7bn this week, despite falling on Nov. 24 to $43.7bn.
The Tether sell-off has been sparked by skepticism from some large investors regarding the strength of the stablecoin’s financial reserves. After the fall of FTX, mistrust increased. Despite the fact that Tether has insistently explained that it has no material exposure to the failed exchange.
The decline in the confidence of large traders has resulted in a massive swap from USDT to USDC, which has been observed in recent days. The precedent for a similar movement recorded after the collapse of the Terra/Luna cryptocurrency is not without concern for many.
When the price of the algorithmic stablecoin created by Do Kwon and Daniel Shin’s South Korean company TerraLabs completely tanked, about $10 billion of USDT was exchanged over two weeks.
The distrust and pessimism of the market have also manifested themselves in the price of other stablecoins, such as Binance’s BUSD. The token’s supply has decreased from $23 billion to about $22.5 billion, representing a net loss of $500 million, according to data from CoinMarketCap.
The other stablecoin that has been able to overcome the difficulties arising from the crypto winter is Pax Dollar (USDP) whose demand has also grown along with that of USDC. However, the loss of parity of the currencies linked to the dollar has become frequent.
Sourced from dailycoin.com.
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by Santiago Contreras on 2022-11-29 18:30:37.
