2023-02-16 20:11:20
Stablecoin Giant Tether (USDT) Struggles to Maintain DominanceInvestors are fleeing from Tether (USDT), says on-chain data. The stablecoin giant, as a result, has lost significant market share amid a slew of market corrections.
Tether’s Losing Market ShareTether currently sits on a $68 billion market cap, the lowest since October last year, down from the recently established all-time high of $83 billion. Since then, the stablecoin underwent a cascade of repeated declines. According to the data from CoinGecko, it freshly shed around $4 billion since June 14 alone.
TerraUST’s collapse pushed market players to seek sanctuary in other digital assets that maintain a one-to-one peg with the USD. As a result, the ensuing market contagion drove crypto and stablecoins to wobble, during which USDT briefly lost its dollar parity as it plunged to 95 cents.
While it managed to re-peg quickly, the deathly spiral resulted in many investors ditching the stablecoin giant for its rival – USDC, a top contender. Upon gauging further, it was found that, unlike the falling market cap of USDT, Circle’s flagship stablecoin has continued to follow an upward trajectory.
After topping out in the first week of March, USDC’s market cap quickly bounced back in mid-May. As reported earlier, it even went on to become the stablecoin of choice on the Ethereum blockchain.
During the same time, Binance USD (BUSD) also noted a minor but relevant bounce back up. With TerraUSD gone, the three largest stablecoins – Tether, USD Coin, and Binance USD – have managed to retain their positions in the top ten leaderboard.
Tether’s shrinking market cap comes days after it refuted rumors that the stablecoin is largely backed by Chinese and Asian commercial paper. Regarding the recent events impacting the crypto lending platform, Celsius, the stablecoin issuer stated,
“Celsius position has been liquidated with no losses to Tether. Tether’s lending activity with Celsius (as with any other borrower) has always been overcollateralized. Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company. Tether is aware of other rumors being spread, suggesting that it has a lending exposure to Three Arrows Capital – again this is categorically false.”
Separately, Tether’s CTO – Paolo Ardoino – outlined an attack against the company’s servers, but reassured that it was not successful.
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