On March 11, Circle’s USDC stablecoin was de-pegged, taking more than 7 billion USDC stablecoins out of circulation. This happened after it became known that an American bank, SVB, was in deep trouble. In fact, SVB was the bank where Circle held more than $3 billion in reserves for USDC. This created panic, USDC lost its peg to the dollar, and the number of USDC stablecoins in circulation fell by more than 10% over a 30-day period. Not long after the panic, USDC was able to get back on the peg, too peg, to be found with the dollar. Nevertheless, the damage was already done for Circle. And what appears now? Perhaps USDC’s biggest competitor, Tether’s USDT took full advantage of the turmoil.
BUSD in circulation is also falling sharply
BUSD, another stablecoin issued by Binance, also saw a drop in the number of coins in circulation. In the past 11 days, the number of BUSD fell from 8.6 billion to 8.2 billion, a decrease of 4.7%. Binance itself is currently holding 7.42 billion BUSD, while the amount of BUSD in circulation has dropped 46.3% in the past 30 days. This decline is attributed to the SEC’s recent decision to go after Paxos. Paxos is responsible for the issuance of BUSD together with Binance.
Not only Circle has had a tough time lately. BUSD was also hit hard, although of course for a completely different reason than Circle’s USDC.
Tether USDT takes full advantage
Unlike USDC and BUSD, Tether (USDT) saw an 8.7% increase in the number of coins in circulation, with a total market valuation of approximately $75.29 billion and USDT 75.17 billion in circulation. This shows that despite the recent volatility of the stablecoins, some coins are still in demand by investors and traders. It also means that USDT is still by far the largest stablecoin in the market.
In short, these numbers show that while stablecoins are less volatile than other cryptocurrencies, they are still sensitive to market fluctuations.
Tags: Number USDC stablecoin circulation fell panic