USDC, the dollar-pegged stablecoin launched by Circle and Coinbase back in October 2018, has become the second stablecoin to see its circulating supply surpass the 1 billion mark after Tether’s USDT.
USDT maintains a commanding lead within the stablecoin market with its total market cap exceeding $10 billion on June 30, only behind Bitcoin and Ethereum. This also makes USDC the 18th cryptocurrency in the decentralized space to have a 10-digit circulating supply.
The cryptocurrency market has seen a surprising uptick in demand for stablecoins like USDT and USDC, especially after the Black Thursday crash of the crypto space, which saw the value of Bitcoin and almost every other altcoin fall by over 50%.
The volatile nature of cryptocurrencies has made investors seek out stable assets to hedge their risk in troubled times. Thus the demand and use of stable coins have grown significantly.
Joao Reginatto, director of product manager at Circle, took to Twitter to announce the $1 billion circulating supply for USDC.
— Joao Reginatto (@reginatto) July 1, 2020
The Stablecoin Market Dominated by Tether
Stablecoins were invented to help provide easy on-boarding for investors, as in the beginning, and even now, many countries do not allow for direct purchase of crypto via fiat. Consequently, stablecoins have been in high demand since the advent of crypto exchanges. However, now it has become an integral part of the ecosystem, and people are also using it to hedge their risk.
With several stable coins available in the market including USDT, USDC, Paxos Standard (PAX) and TrueUSD (TUSD), Gemini Dollar (GUSD), and many more, a majority of the market is captured by USDT itself, where it enjoyed a market dominance of over 90% followed by USDC with near 3%-5%. The remaining stable coins control a fraction of the available market.
A recent study from Skew suggests that USDT’s dominance is no more limited just to spot markets, and USDT-margined derivatives contracts are emerging and could gradually replace coin-margined contracts over the next year.