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USDC v. USDT – Is This Stablecoin Nearing Its ‘Circle’ Of Life?

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The cryptocurrency market, including the stablecoin sector, continues to see new daily developments. Things took a turn for the worse when Terra USD came into view. It didn’t take long before it crashed and burned, with all its glory gone in an instant. While some struggled to move on past the de-pegging event, others might have found a solid ground to stand on.

It’s not surprising that USDT has been the dominant force in stablecoins for a few years now. However, Circle’s USDC is the one making headlines today – after all, it is their closest rival.

Circle Of ‘Stable’ Life 

Five months ago, USDC surpassed a milestone of 50 billion in circulation. The USDT, on the other hand, maintained its significant gap over competitors despite this achievement. The USDT has been leading mostly in terms of market capitalization and the number of daily transactions on Ethereum’s blockchain. Now, this gap may have taken a big hit.

Finally, USDC has crossed Tether by the number of daily transactions on the Ethereum blockchain. This means that Circle’s USDC Coin is now more trusted than any other stablecoin currently available in crypto. 

Alex Svanevik, CEO of on-chain data hub Nansen recently shared this milestone with his followers on Twitter:

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it happened – USDC flipped USDT on # txs https://t.co/yLGafFyJJS pic.twitter.com/byTk6YOWRe

— Alex Svanevik🐧 (@ASvanevik) June 20, 2022

The circle’s dollar-pegged stablecoin has not yet flipped the number one traded token by market capitalization (USDT). The two cryptocurrencies are currently valued at $67.8 billion and $55.5 billion, respectively; however, Tether might lose its footing or even battle with given headwinds. The USDC was able to find investors amidst this chaos.

The USD de-pegging and subsequent collapse sent shockwaves across the crypto market, crashing coin values everywhere. Major stablecoins such as Tether and USD Coin saw major changes during this period. In fact, USDT is not yet at the $1-peg; it’s currently around $0.99 at the time of writing this.

To make matters worse, Tether was hit with a DDoS attack, and their Chief Technical Officer Paolo Ardoino confirmed it. They received 8 million requests in 5 minutes as opposed to the usual 2,000 every 5 minutes.

On the other end, USDC has maintained its $1 peg. It turns out that USDC is the most popular stablecoin when it comes to transferring volume. In fact, they hold a 51.4% share on this front.

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Tether and DAI only have shares of 25.2% and 11.5%, respectively.

Stablecoin transfer volume per coin last 30 days

Stablecoin transfer volume per coin last 30 days | Source: Dune Analytics

The USDC has never before experienced such a hike in the midst of chaos.

Is It Game Over For USDT?

No, not even by a long shot. Tether (USDT) remains a top player in the stablecoin market, but regulatory scars are alarming.

Tether has come under fire for their ‘backing’. The company has been facing multiple lawsuits over the past couple of years, but they continue with transparency campaigns even though it doesn’t seem to have any effect on the bad press.

On the other hand, Circle hasn’t faced such regulatory hurdles. But only time will tell how this competition will go.

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Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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