USDC/USD: Circle continues to lose market share to Tether, resulting in a falling market capitalization.

The adoption rate of USDC, the second-largest stablecoin with a market cap of $32.5 billion, has been slowly declining as the Circle-issued token's redemptions have increased. Recent concerns began when Circle disclosed that it held approximately $3.3 billion at the now-defunct Silicon Valley Bank, causing USDC to briefly de-peg from the USD. Later, SVB depositors were notified that their deposits would be returned in full, but confidence in the stablecoin appears to have been shaken.

What is happening with USDC?

In the last month alone, USDC's market capitalization has dropped a staggering $10 billion. In the 24 hours between Wednesday and Thursday of the previous week, the total value of tokens redeemed for US dollars reached $463 million. The company's CEO took to Twitter to allay the fears of token-holders, emphasising that despite heavy outflows, 1 USDC has always been redeemable for 1 USD. Despite fluctuating confidence in the token, analysts assert that USDC is still the dominant stablecoin for DeFi protocols, despite Tether's overall dominance.

Regarding Tether...

To this competitor, Circle is losing market share. In the same month that USDC's market cap decreased by $10 billion, Tether's USDT market cap increased by roughly $8.5 billion, indicating that USDC's outflows are not a concern for the stablecoin market as a whole, but only for USDC. Tether's dominance of the stablecoin space is at a 22-month high, with a market cap of nearly $80bn and a market share of nearly 60%, and it shows no signs of relinquishing its grip on the market any time soon.