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The USD Coin has started to converge with major stablecoin Tether in terms of market capitalization as investors look for a safe haven in other digital tokens.
Source: Bloomberg
USDC is down 0.01%, while USDT is down 6.94%.
Circle’s USD Coin has benefited from the recent descent of Tether, with its circulation increasing by almost $3.4 billion. Other stablecoins have also recorded a similar movement, with Binance’s USD marking a $1.2-billion increase.
The increase comes as investors have been reported to have been recording higher trading movement after Tether’s USDT temporarily failed to keep its peg to the US dollar and dropped to 95 cents on May 12.
Circle Chief Executive Jeremy Allaire also noted that Circle posted higher demand following the collapse of Terra, causing investors to look for other safer tokens that have continued to keep their peg with the greenback.
Analysts believe that the recent growth of USDC may indicate the shift in market preference from USDT.
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