Tether’s USDT market cap hit $75 billion on Friday morning for the first since last May, data from CoinMarketCap shows. The new figure means that USDT’s market capitalization is now twice as much as that of Circle’s USDC, the second-largest stablecoin.
These two stablecoins are currently the market leaders by market cap for this type of cryptocurrency. In recent years, stablecoins have grown to become a key feature in the crypto industry, increasing in value year after year.
For example, in March 2020, USDC only had a market cap of approximately $560 million. But today, CoinMarketcap indicates that the figure has skyrocketed to $37 billion.
The USDC’s market cap, however, took a tough hit over the past weekend following the collapse of Silicon Valley Bank. The stablecoin lost its expected $1 peg after Circle disclosed that it had deposited some of the USDC’s cash reserves in the now-fallen bank. Before the announcement, USDC’s market cap was $43.5 billion.
A large number of investors appeared to have converted their USDC holdings to the stablecoin’s rivals during its brief depegging, and the latest data shows they haven’t returned yet.
USDT Dominance Increases
Although USDC’s troubles seem to have been resolved, still many crypto users have, to a greater extent, chosen USDT. The Tether’s stablecoin’s dominance has evidenced this after surging by 58% over the past ten months, according to data from Glassnode. Meanwhile, the USDC’s dominance dropped sharply by 30% within the same period.
Another reason driving USDT’s dominance is the troubles surrounding the Paxos-issued stablecoin, BUSD. A regulatory crackdown was recently imposed on the third-largest stablecoin forcing its issuer to halt the minting of more tokens.
Recent data shows that most BUSD investors have moved their funds to USDT, causing the market cap of the Binance-branded stablecoin to fall from $16.4 billion on February 14 to $8.2 billion as of this writing.
FUD Still Surrounds USDT
Despite investors feeling bullish about USDT, concerns remain over its little-known reserves.
Besides that, the recent downfalls of many crypto firms have given rise to questions regarding whether USDT was exposed to any of those companies. But Paolo Ardoino, Tether CTO, has insisted that the firm has no exposure to the collapsed companies, including the crypto-friendly banks that ceased operations a few days ago.