On-chain data indicates that USDC has a far higher transfer volume than its primary rival USDT, despite having a considerably smaller market valuation.
Up until May 2021, when Tether boosted the token supply from $8.79 billion to $61.82 billion, or a 603% increase, USDT has been recording transfer volumes far greater than USDCs.
The collapse of FTX sent shockwaves across the cryptocurrency community and had a detrimental impact on the market, but the Stablecoin (USDC) benefited from the situation as seen by the rapid rise in its popularity. Data and figures from a blockchain analytics company called Glassnode show that the daily transfer volume has surged five times over that of major competitor Tether.
USDT's market valuation is approximately $23 billion more than USDC's. As of January 10, the gap was four and a half times in favour of USDC. Citing a controversial statement from Binance CEO Changpeng Zhao on November 6 declaring Binance will liquidate all of its FTX Token assets, both stablecoins experienced increases in transaction rates. The rapid collapse followed for FTX.
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According to Glassnode data, USDC has now become the currency of preference for crypto consumers, with daily exchange volumes totalling over $12.5 billion surpassing those of USDT. While all stablecoins are anchored by reserves maintained by their issuers and are intended to exchange as similarly to one U.S. dollar as feasible, some members of the cryptocurrency ecosystem believe USDC to be a relatively secure alternative.
Proponents cite the USDC's holdings, which are secured by cash or short-term U.S. Treasury bonds, as well as the monthly assessments conducted by the renowned international accounting firm Grant Thornton. For failing to provide a full assessment and remaining less open about its holdings, Tether has been under fire for a long time.
The Commodity Futures Trading Commission imposed a $41 million punishment on the firm controlling USDT in October 2021 after alleging that it only maintained adequate reserves of 27.6% between 2016 and 2018 while stating that its tokens were completely endorsed by fiat currency.
The most recent asset analysis, released on Nov. 10, reveals that approximately $46 billion of Tether's reserves are made up of cash, cash accounts, and U.S. treasuries. Tether has been phasing out the treasury securities that back its released tokens in favour of better options.
After the FTX crash, USDT momentarily lost its anchor to the US dollar due to worries over liability to Alameda Research and FTX, although Tether disputed this. These companies may have been intending to short the stablecoin, according to on-chain data.
Up to May 2021, when Tether boosted the token's supply from $8.79 billion to $61.82 billion in the preceding year, a rise of 603%, USDT was already registering exchange rates far greater than USDCs. Tether has cited the rise in market valuation as evidence of "the market's sustained faith and belief in Tether" notwithstanding the ensuing shift in user choices. It said that each token might be exchanged for dollars at a 1:1 ratio.
