The life of USDC Is Over: Why did it fall by $10 billion

Tether stable coin (USDT) has significantly strengthened its market position over the month amid capital outflows from the USDC token. USDT’s market share of dollar-linked digital currencies reached a 22-month high.

Since March 10, traders have withdrawn more than $10 billion from USDC after U.S. authorities shut down Silicon Valley Bank.

Circle, the company that issues the USDC, was able to reestablish a peg of the stable coin to the U.S. dollar. However, the lion’s share of the capital withdrawn from this digital asset still went to Tether. USDT’s market supply at the end of March is approaching $80 billion, while USDC’s capitalization has shrunk to $33.243 billion.

The position of the third-largest stable coin Binance USD (BUSD) has also deteriorated markedly over the past month. For the first time since June 2021, its supply has fallen below $10 billion, now at $7.663 billion.

A report from Enigma Securities said March was a very tough month for Circle. The USDC issuer transferred all of its reserves in dollars to BNY Mellon Bank. However, it will take a long time for the company to recover its financial position and make the stable coin more attractive.

By contrast, Tether’s capitalization has increased by about $8 billion since March 10. According to the DeFiLlama platform, the USDT dominance index has exceeded 60% in the stable coin market. The last time a similar situation was observed was in May 2021. In an interview with CNBC, Tether CTO Paolo Ardoino recently said that his company has about $1.6 billion in excess reserves. Its profit in the first quarter could be as much as $700 million