Glassnode, a popular blockchain analytics company has recently reported that the daily transaction volume of USD Coin (USDC) has increased heavily. It mentioned that the transaction volume has increased four to five times as compared to its primary rival, Tether (USDT). In addition to this, the stablecoin USDC popularity increase has also been a major thing to look at this time.
Despite USDT’s $23 billion market capitalization over USDC, this report holds true. As of the 10th of January 2023, USDC has enjoyed around a four-and-a-half-fold advantage. Changpeng Zhao (CZ), CEO of the Binance cryptocurrency exchange, had an infamous statement back on November 6, 2022. He stated that Binance will sell all of its FTX token holdings, FTT. Following this statement, the transaction volumes of both stablecoins have increased. Additionally, the stablecoins market saw USDC popularity increase.
Shortly after this, FTX declared bankruptcy by filing Chapter 11. Since this incident, the USD Coin (USDC) has overtaken Tether (USDT) in daily transaction volume by $12.5 billion dollars on average. This is according to the Glassnode statistics. The USDC stablecoin may be a safer option than other stablecoins because it is guaranteed by the reserves held by its issuer. All stablecoins are designed to trade as close to one US dollar as possible. For more altcoin cryptocurrency news, visit https://cryptoventurenews.com/category/cryptocurrency-news/altcoin-news/.
Short-term US treasuries and cash secure the USDC assets. Grant Thornton, a worldwide accounting firm, carries out monthly audits of the stablecoin. That said, Tether (USDT) has always been criticized for its inability to deliver a complete audit. The stablecoin is also accused of not being forthcoming enough about its holdings over the years.
In October 2021, the Commodity Futures Trading Commission (CFTC) penalized the company behind USDT with a worth of $41 million. This was solely owing to having enough reserves of 27.6% of the period between 2016 and 2018. The CFTC has also mentioned that the USDT tokens were completely backed by fiat currency.
In the asset breakdown released on the 10th of November, Tether (USDT) disclosed that approximately $46 billion of its holdings consist of cash, bank deposits, and U.S. Treasury securities. As a result of the fall of FTX, USDT temporarily lost its peg to the dollar on concerns that it was connected to Alameda Research and FTX, something Tether has denied.
Based on on-chain evidence, both companies attempted to short the stablecoin. Tether raised the supply of USDT from $8.79 billion to $61.82 billion during the last year. It signified a growth of 603%. This resulted in USDT’s higher transfer volumes than USDC until May 2021.
While consumers’ preferences may have changed, Tether cited the rise in market capitalization as an indication of “the market’s sustained faith in Tether” and stated that every token is worth $1.
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