The stablecoin market is still largely dominated by Tether (USDT), but its rival USD Coin (USDC) is attracting more and more investor attention… An underlying trend?
Investors looking to USDC
It was the analysis firm Glassnode that noticed this trend in a note to its users. The “ massive influx“ of USDC on the exchanges is recent, since it really started in January, although there has been an increase since the end of 2020:
For the month of January alone, the number of USDCs on the exchanges increased by + 112%, taking it from $ 431 million to $ 915 million . We also note that the price of the USDC is particularly stable at the moment and sticks more to a dollar (USD).
Good news for Bitcoin (BTC) and altcoins?
As Glassnode points out, the news is not only good news for stablecoin enthusiasts, it represents an influx of money for the cryptocurrency field in general:
“This trend is bringing more purchasing power to the cryptocurrency market, which acts as a catalyst on hold, ready to be used for purchases of BTC and other crypto assets . “
Investors often choose stablecoins in order to stabilize their funds before exchanging them for more volatile cryptocurrencies. It is therefore a “bullish” signal, as Glassnode concludes:
“[This influx] can bolster investor confidence that any fall will be easily offset by purchases . “
Tether remains the king of stablecoins
The USDC is of course still far behind Tether (USDT) , which is now firmly established in third place in the ranking of cryptocurrencies by capitalization, with a market cap approaching $ 27 billion currently. But could that change?
Questions continue to be asked about Tether’s reserves, which is supposed to back each USDT to a dollar. Specifically, the stablecoin has been accused of using Bitcoin (BTC) instead of dollars . Its partner bank Deltec has itself left a vagueness about the nature of this reserve .
Tether’s lack of transparency – along with the legal worries this causes the project – could therefore allow other stablecoins like USDC to thrive. The latter has indeed made the opposite choice and proves each month that he holds the same number of dollars as the USDC in circulation, thanks to reports from the firm Grant Thornton. Will this be enough to distract from investors who still largely favor USDT? It remains to be seen.