Undoubtedly, the two leading stable coins in the crypto ecosystem today are the USDT and the USDC. These two coins are used globally in exchange for many countries’ legal tender fiats and are also paired with the majority of cryptocurrencies used for daily trading on exchanges.
Many crypto enthusiasts also prefer to convert their fiats and other cryptocurrencies to USDT or USDC when they suspect the imminence of inflation of bearing period. Traders of cryptocurrencies believe that having either USDT or USDC in their wallets will guaranteed a stable value of their money.
Incidences in the recent time, have revealed the strength and weakness of the two stable coins aforementioned. A closer look at the USDT and USDC will crypto users determine which to adopt or adopt both in case the unknown happens as in the case of TerraUSD (UST) when LUNA crashed to zero.
According to on-chain data, USD Coin (USDC), a stablecoin issued by the U.S.-based Circle Financials Ltd., is taking the lead over its top rival, Tether (USDT), when it comes to institutional adoption.
USDC daily transfer volumes are increasing. The market valuation of USDC tokens in circulation is approximately $44 billion, compared to USDT’s $65.42 billion.
However, according to Glassnode data, USDC’s daily transfer value on the Ethereum blockchain has been consistently larger than USDT throughout 2022.
For example, as of November 22, the USDC daily transfer was over $14 billion, compared to $5 billion for the USDT. Daily USDC vs. USDT transfer volume, according to Glassnode
In other words, USDC users make more capital transfers than USDT users, implying that USDC is becoming the stablecoin of choice for high-net-worth institutions such as institutional whales, hedge funds, family offices, crypto exchanges, and so on.
Furthermore, as of Nov. 22, USDC led USDT in terms of supply weight across smart contracts. Notably, the former accounted for 33.75% of total stablecoin supply locked up in staking pools.
In comparison, the supply of USDT is roughly 12.50%. USDC supply vs. USDC demand in smart contracts Glassnode is the source.
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However, the fact that Tether has a greater daily transaction count than USDC shows that it is more likely used for retail trading and transfers such as remittances. Daily USDC vs. USDT transaction count
According to Cointelegraph, USDC, on the other hand, appears to be a top stablecoin alternative for tech-savvy institutional traders looking to generate income by locking their cash in staking contracts.
This is seen in USDC’s lower daily active address count of 40,245 versus USDT’s 73,000 on November 21. USDC vs. USDT active addresses on a daily basis
Furthermore, crypto trading platforms that implemented “proof-of-reserves” following the FTX crash tend to hold more Tether than USD Coin, indicating that USDT is likely more popular among retail traders.
Binance, KuCoin, BitFinex, ByBit, OKEx, and Huobi are among these exchanges. The reserves at Crypto.com are the outlier, with more USDC than USDT. Proof of reserves from Crypto.com CoinMarketCap.com is the source. Tether’s market cap falls following the ETY colloquium.
After the FTX exchange collapsed over two weeks ago, the USDT market capitalization fell by nearly $4 billion.
Tether briefly deviated from its $1 price, reaching 96 cents on Nov. 10, after freezing $46 million in USDT tokens related with FTX.
Surprisingly, the USDC market worth increased by approximately $2 billion after the FTX debacle began on November 10.
USDT vs. USDC market capitalization performance over the previous six months Tether has a history of violating its dollar peg during times of intense market stress, albeit to a lesser extent in recent years.
For example, during the May crypto market selloff, the token fell below 95 cents, coinciding with a surge in USDC’s market cap.
This shows that some investors are shifting their funds from Tether to USD Coin now that the former has lost its dollar peg.
Tether, on the other hand, quickly returned to dollar parity, claiming that the tokens in circulation are 100% backed by reserves and tied 1-to-1 to dollars.
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