Is USDC slowly regaining market interest in stablecoins?

All in all, stablecoins have been hit hard after the TerraUSD (UST) de-peg. The event saw UST drop from the once steady $1 equivalent to $0.06 per UST today. Now, to replace that lost trust, the second-largest stablecoin provider, Circle (USDC), has taken some measures.

Circle published a blog post on May 13, entitled ‘How to Be Stable’. This post combined Circle’s efforts around trust and transparency with USDC.

Cryptocurrency exchanges have shown some confidence in the second-largest stablecoin in the ecosystem. Cryptocurrency exchange OKX announces listing currency pairs with USDC on the spot market.

Jeremy Allaire, CEO of Circle acknowledged this development in a tweet on May 23 that:

Such stories can play an important role in providing some certainty amid the chaos. Well, it seems to work as trading volume skyrocketed over 24% in the past week. In addition to maintaining transparency, Allaire also promises weekly USDC reserve and liquidity activity reports.

Allaire also shares USDC Assurance Report and said:

ZachXBT said, consider the timing of this news; 2018 “ICO era” scam wallet triggered when developers tried to withdraw $22 million in USDC.

Here are a few signs of increasing volume. The exchange net flow reached ATL $20,349,225.13. This signals a positive shift in investor sentiment. The previous ATL of $17,229,420.56 was observed on 27 April 2022.

A steady cash outflow would indicate a strong hold sentiment and take away circulating supply from the market. Furthermore, the number of addresses with non-zero balances also saw an increase.

Both Circle and Tether are pegged to the USD, and both are very popular. Although Tether (USDT) is the biggest stablecoin yet, USDC is rapidly catching up, with a growth rate of 5x in the past 12 months. It is fully backed by cash and short-dated U.S. government obligations. Considering that USDC is a much safer store of value, this rapid increase is no coincidence.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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