The Rise of USD Coin: A New Contender
In the chaotic world of cryptocurrency, USD Coin (USDC) has rapidly ascended the ranks, especially since the unexpected collapse of a major player, FTX. When headlines broke about Binance’s CEO, Changpeng Zhao, liquidating FTX Token (FTT) holdings, the ripple effects were felt far and wide. Since that momentous tweet, USDC has been like a phoenix, soaring to mesmerizing heights on the Ethereum network.
Transfer Volumes: USDC Outperforming USDT
Since FTX’s dramatic downfall, USDC’s ERC-20 variant has been clocking in transfer volumes averaging over $12.5 billion more per day than its rival, Tether (USDT), based on data from Glassnode. At one point, USDC’s daily transfer volumes were a staggering four to five times greater than those associated with USDT on the same network, despite USDT commanding a $23 billion greater market cap overall.
The Wick Effect
It’s noteworthy that the surge in activity wasn’t just a coincidence. Both stablecoins saw an uptick in transfer activity following the FTX scandal, indicating that crypto users were fleeing from uncertainty towards USDC for a sense of stability.
Why Choose USDC? Transparency and Trust
The crypto community often points to USDC as the ‘safe choice’ for traders. Its assets are backed by cash or short-term U.S. treasuries, and it undergoes monthly audits performed by Grant Thornton, a top-tier global accounting firm. In contrast, Tether has been under scrutiny for not providing sufficient transparency regarding their reserves. The accusations are spicy enough to give anyone heartburn—USDT was once fined $41 million for holding reserves only 27.6% of the time!
Tether: A History of Controversy
Despite its dominance and sphere of influence, Tether has had its fair share of ups and downs. Following FTX’s implosion, USDT briefly lost its dollar peg amidst fears of links to Alameda Research. This was a shaky moment, as traders panicked about potential repercussions. Nevertheless, Tether staunchly denied these allegations and reassured the public that every token could be redeemed for U.S. dollars on a 1:1 basis, calling it a sign of market trust in their product.
The Future of Stablecoins
As of now, with transfer volumes still favoring USDC, the crypto world watches eagerly to see how this rivalry will unfold. Will Tether reclaim its former status, or will USDC continue to capture the hearts—and wallets—of crypto enthusiasts? Only time will tell, but for now, USDC seems to be riding the wave of change, leaving behind a trail of excitement and potential.
