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USDC and USDT are both examples of some of the largest stablecoins. Tether has always remained at the top of the stablecoin pyramid, but increased legal issues and controversies around the stablecoin have caused investors to choose USD Coin over Tether. Recently, a study conducted by Glassnode, an on-chain data analytics platform, revealed that the world's second-largest stablecoin is gaining more traction as crypto investors are discarding USDT, which is quite evident in the total number of suppliers added to the coin in the last month alone.
According to reports, the market capitalization of USDC has increased by over US$5 billion within a period of two months. The crypto has now become the stablecoin of choice on the Ethereum blockchain, and not Tether. In fact, institutional crypto whales, who are some of the biggest cryptocurrency holders in the market are shifting large amounts of their holding amid swaying market prices. Tether had already started losing its market dominance when TerraUSD fell.
Currently, one of the major factors that are aiding USDC's rise is the recent FUD surrounding USDT. Circle, the USDC issuer, is quite well-known for sticking to the law, unlike USDT which has a number of legal issues. Circle has also decided to launch a new cryptocurrency called Euro Coin, which will be similar to the USDC, instead, it will be supported by the European currency.
It is quite evident that other dollar-pegged tokens are eating up Tether's share, resulting in a sharp drop in the total stablecoin supply in the second quarter of 2022. USDT has witnessed massive drops, wiping away approximately 7 billion of its supply within a month. The rapidly declining value has actually got investors quite worried about their USDT investments, and also about the stablecoin market. Nevertheless, as the entire crypto market suffers, all cryptocurrencies, including stablecoins are massively plummeting.
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