After Terra’s UST collapsed, there was a pointy concentrate on dollar-pegged stablecoins. There are in reality fears that one other de-pegging may pose systematic dangers for the whole crypto market. Nonetheless, USD Coin has emerged as one of many key alternate options to Terra’s UST. Here is why:
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USD Coin is managed by a verified consortium of specialists.
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USDC can be backed by {dollars} which are literally held bodily in reserve.
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The stablecoin can be backed by different reserve belongings together with US treasury payments.
Data Source: TradingView
Why is USD Coin behind Tether?
With the attributes listed above, it’s clear that USD Coin has all of the makings to turn out to be an enormous stablecoin. In reality, its market cap has been growing, particularly after the collapse of Terra UST. However, there are some indicators that USDC just isn’t growing as quick as its market cap suggests.
For occasion, USDC liquidity on Uniswap, one of many largest DEX on the planet, has dropped considerably in current months. High liquidity on a platform like Uniswap typically signifies {that a} stablecoin is in excessive demand. The undeniable fact that USDC is dropping is a priority.
We are additionally seeing the most important wallets favoring Tether. In reality, analysis by Glassnode notes that the share of USDC held by 1% of the most important crypto wallets is at a one-year low. While this isn’t a sufficiently big concern, it suggests that there’s restricted demand for the coin.
Is USDC going through De-pegging dangers?
At the second, there’s nothing that signifies USDC is going through any doable danger of de-pegging. The UST collapse after all has put buyers on edge. But to this point, USDC has managed to take care of a secure peg on the greenback.
It is unlikely we’re going to see any de-pegging quickly. However, one factor we may be certain about is that USDC is years away from competing with Tether.
