Latest Data Shows USDC in Circulation Has Fallen 10% Since De-Peg Incident

The stablecoin market has not been “stable” over the past week. The leaders of this category, like USDC and DAI, traded below their expected $1 price last weekend following banking chaos stemming from Signature Bank and Silicon Valley Bank.

USDC hit an all-time low of $0.87 on March 11, while DAI traded within the $0.88 mark. However, as of this writing, the two stablecoins have fully regained their pegs and are trading at $1, data on CoinMarketCap Shows. However, despite USDC managing to handle its troubles, it appears that its investors are still selling their holdings.

On March 6, before USDC depegged, there were 43.93 billion tokens in circulation. But as of today, that figure has dropped to 36.74 billion, representing a decrease of 16%.

BUSD Also Records Decline

Currently, the total BUSD tokens in circulation stand at 8.21 billion. In the past 24 hours alone, over 30 million tokens have been redeemed. CoinGecko data indicates that the circulating BUSD has declined 45% in the last 30 days.

The drop could be deeper in the coming days as crypto exchange Binance plans to convert its $1 billion in BUSD to other coins like Ethereum and BNB. The exchange had initially set aside these funds to help crypto companies affected by FTX’s crash solve their financial problems.

The BUSD drop is largely fueled by the US Securities and Exchange Commission’s decision to serve the stablecoin’s issuer, Paxos, a Well Notice in February. The agency instructed Paxos to halt the minting of more BUSD tokens. The move prompted the company to end its partnership with Binance.

USDT Benefits From USDC and BUSD Troubles

While USDC and BUSD continue to record drops, Tether’s USDT, on the other hand, has been posting massive gains in its market cap over the last seven days. The largest stablecoin currently has a total value of $75.1 billion for the first time since last May. Before the Silicon Valley Bank collapse, USDT had a market cap of $71.3 billion. Therefore, the current figure means it has increased by 6%.

Crypto analysts say the increase is likely due to BUSD and USDC investors converting their holdings to USDT.

Maker’s DAI is another stablecoin that has posted an increase in its market cap. Data on CoinGecko shows that the largest decentralized stablecoin currently has a total value of $5.5 billion, up from the $4.8 billion it had before the banking chaos started.

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