USDC stablecoin market cap has surged by $7B since May — what does it mean for rival USDT?

LAGOS (CoinChapter.com) — The crypto market’s ongoing downtrend has had different impacts on the two largest stablecoins by market capitalization: Tether (USDT) and USD Coin (USDC).

During bearish periods investors usually move their funds into stablecoins to wait out the downturn. However, TerraUSD’s collapse in the early part of May triggered a panic rush for investors in the crypto industry.

USDC, the second leading stablecoin, was one of the few assets able to withstand the recent selling pressure. According to Coingecko, the token has witnessed over $7 billion in inflows since May, making it the most used stablecoin among the lot.

Data from the cryptocurrency aggregator indicated that the USDC market cap rose from around $48 billion in May to more than $55 billion on the day. Moreover, USDC currently stands as the fourth largest asset at the time of publication.

Additionally, USDC, during the peak of the market crash in May, was able to maintain its peg to the dollar. The stablecoin opened on May 1 at $1 and reached a monthly high of $1.01 on May 12. It tested a monthly low of $0.9993 on May 10 but closed the month at a trading price of $1.

At press time, it still stands at $1 with a 24-hour trading volume of $4.6 billion and a circulating supply of 56 billion USDC coins. Overall, there was no change in the opening and closing price of the token in May.

Tether’s USDT Market Cap Drops 19%, Meanwhile

However, in a contrary development, Tether’s stablecoin has dropped significantly since the beginning of last month. Coingecko revealed that the leading stablecoin had lost more than $16 billion since May 1.

Tether’s market cap has lost 19% since the start of last month. The token market cap dropped from around $83 billion on May 1 to $66 billion on the day. Notably, this implies that large investors had been pulling out their USDT portfolios since last month’s market crash.

As a result of its shrinking market cap, the gap between USDC and USDT has reduced to around $12 billion. Notably, this is the lowest it has been since the closing part of 2020.

Furthermore, it is important to note that despite the massive decrease in its market cap, Tether has maintained its peg to the dollar. Tether’s Chief Technology Officer, Paolo Ardoino, has also emphasized the company’s ability to withstand the current turbulence.

Notably, USDT was trading at around nine cents at the time of publication. The stablecoin had a 24-hour trading volume of $41.4 billion with a circulating supply of 67 billion USDT coins.

Tether To Launch Stablecoin Pegged To British Pound

Meanwhile, in another development, Tether has announced plans to issue a stablecoin pegged to the value of the British pound.

According to the announcement, the GBPT token is part of Tether’s push into new stablecoins. The company disclosed that GBPT would be available to trade on the Ethereum blockchain from next month.

The new pound token comes as central banks in Europe and the UK are exploring state-owned stablecoin. Recall that the Bank of England is discussing with market participants about issuing a digital sterling.

Currently, Tether offers tokens pegged to the US dollar, euro, Chinese yuan, and Mexican peso, having launched the latter last month.