Unrest in the Stablecoin market: $2B + USDC Redemption in 30 days

• USDC circulation dropped by 4.9% while Tether’s circulation increased by 3%.
• The Stablecoin economy accounts for 12.9% of the total crypto economy. 
• Eight out of every 10 trades are conducted using stablecoins.

Stablecoins were presented as the ultimate solution for crypto volatility and bridge between fiat and cryptocurrencies. It was also deemed a fix for the nations with underdeveloped economies. 

Tether saw a 3% increase in circulation in January. At the same time, USDC recorded a drop in circulation by nearly 4.9%. Between February 6, 2023 and February 10, nearly $2.196 billion worth of USDC were redeemed.

Latest statistics paint a clear picture of where the whole stablecoin market capitalization suffered a loss of nearly $625,009,636 since January 6, 2023. The major part of this drop is because of a loss in the USDC market capitalization. Data shows that there was a 4.9% decrease in the last 30 days for USDC, causing a loss of $2.196 billion in the overall valuation from January 6, 2023. Contrastingly, Tether managed to gain by 3%; this rise attenuated the losses of USDC in the overall market capitalization of the entire stablecoin economy.

BUSD, the stablecoin ranked third in the list by market valuation, also saw a correction of 0.5% since January. On January 6, 2023 its market cap was nearly $16.79 billion. it has dropped to $16.19 billion since then.

Other top-10 stablecoins managed to gain in the same period in terms of circulation including DAI, TUSD, FRAX, USDP, GUSD, and USDD were the main players. In terms of circulation, USDD gained 1.3%; USDP managed to rise by 3.3%; and TUSD gained a whopping 11.9%.

Current statistics suggest that the stablecoin economy accounts for roughly 12.9% of the total cryptocurrency economy. In comparison, their trade volume accounts for nearly 81.4% of the all-inclusive trade volume of a cryptocurrency. Data also suggests that nearly 8 out of every 10 trades is conducted using stablecoins across the crypto market. 

Stablecoins have emerged as the best part of the cryptocurrency economy for quite some time now. At the same time, the dollar-pegged tokens received the advantage of the 5% decline in the crypto economy after the financial watchdog of the United States, the Securities and Exchange Commission (SEC), penalized the crypto exchange Kraken for $30 million due to their staking services.

Since their inception in 2014 with the issuance of BitUSD, they have dominated largely in terms of trading volume, but recent statistics show a considerable decline in their circulation.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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