As per the latest data compiled by crypto analytic platform, IntoTheBlock, USDC stablecoin recorded its second-highest volume ever.
USDC Winning the Tussle
ITB said that with Bitcoin and Ethereum going down below $21k and $1,100, the total volume transacted on-chain on USDC reached $38.72 billion.
Interestingly, this isn’t the first time that USDC has sailed through smoothly in the time of a market downturn.
During the UST de-pegging and eventual collapse as well Circle’s flagship stablecoin managed to close the gap to the top centralized stablecoin, Tether’s USDT. This was the time when extreme fear gripped the market, and investors ditched USDT for USDC, which went on to become the stablecoin of choice on the Ethereum blockchain.
In fact, USDC has been gaining market share since the once-$18 billion UST stablecoin went on a death spiral, and USDT’s price wobbled.
Currently, it is the second-largest stablecoin with a $54.23 billion market cap, right after Tether, which stands at a market value of $70.77 billion, according to CoinMarketCap. Much of the effort can also be attributed to the stablecoin issuer and fintech company Circle for pushing USDC adoption through acquisitions and other initiatives.
History Repeats?
The recent market downturn was triggered by the crypto lender – Celsius’s decision to suspend all withdrawals and transactions in a bid to prevent a run on deposits. Amid the worsening macro events on a global scale and liquidity crisis in crypto, another controversial dollar-based stablecoin wobbled.
While centralized stablecoins have been trading just fine, it is the algorithmic ones that are creating trouble once again. This time it is USDD, a stablecoin founded by Tron creator Justin Tron in May 2022, that slid from the dollar peg despite the overcollateralized reserve.
It slipped to the lows of $0.974. According to Sun, the cause of de-pegging was large numbers of short sellers targeting TRX, the network’s native token, on Binance. In an effort to reestablish the peg, the exec said that the Tron DAO Reserve would pledge as much as $2 billion to fight the short sellers.
TRON DAO Reserve, which manages the stablecoin, revealed that it would be withdrawing 2.5 billion TRX out of Binance to “safeguard the overall blockchain industry and crypto market.”