• USDC circulating supply has decreased significantly, resulting in a $100 million drop over the past week.
• Redemptions of USDC have reached $1.4 billion in the past week while new coins issued were comparatively lower at only $3.6 billion.
• Tether’s dominance has strengthened with an increase in circulation of approximately $17.8 billion over the past year.
USDC Circulating Supply Decreases Significantly
Circle’s USDC stablecoin has seen a significant decrease of approximately $100 million in its circulating supply over the past week, leading to a substantial reduction in market capitalization and raising doubts about its future standing as the world’s second-largest stablecoin.
Redemptions Outpace Issuance
Surpassing the issuance of new coins, USDC redemptions reached a substantial $1.4 billion within a seven-day period, as reported by Circle. Over the past month, a significant $4.6 billion has been redeemed while only $3.6 billion in new stablecoins have been issued, leading to an overall contraction of $10 billion in March alone and resulting in a loss of approximately $28 billion in USDC’s market capitalization since last year.
Tether Strengthens Its Position
As USDC experiences declines, Tether , Circle’s primary competitor , is making strides towards consolidating its leading position with an impressive surge of approximately $17.8 billion in USDT circulation throughout the past year – with most growth occurring this year – and an additional increase of approximately $22 million during the same week that saw USDC decrease by 100 million dollars .
Implications for Stablecoins
The absence of growth from USDC despite increasing demand for stablecoins raises questions about its ability to maintain its position against more dominant competitors such as Tether . The implications are far-reaching as investors consider their options when it comes to reliable digital assets that retain their value over time .