USDC, the fiat-collateralized stablecoin issued by payments technology firm Circle, has recently recorded massive growth, as the asset appears to be gaining traction with investors in the space. In light of this, recent research has predicted that USDC will flip USDT as the largest stablecoin in 3 months.
USDC’s market share rose by 42.1% from January to July 2022
The prediction was made in an Arcane Research article published on Sunday. The Research was a follow-up to an earlier look into the stablecoin scene in 2021. The previous analysis made a series of predictions in the stablecoin markets for 2022, one of which was that Circle’s USDC would grow bigger than Tether’s USDT to secure its position as the largest stablecoin.
The prediction was influenced by two significant factors: USDT’s seemingly failing dominance in the stablecoin markets, and USDC’s astronomical growth in recent times, having its market capitalization skyrocket beyond expected levels. The prediction has not yet materialised, but considering recent performances by both stablecoins, the latest Arcane Research has further predicted it to happen in October of this year.
USDT’s dominance started sinking last year – the fiat-backed stablecoin recorded a market share of less than 50% as of November 2021 for the first time since its inception. This marked the outset of its continued slip. Tether’s market cap went from $78.4B on January 1, 2022, to $66.3B on July 1, 2022 – marking a 15.5% decrease in 6 months. The current market cap is $65.85B as of press time.
Furthermore, its market share kept falling further from November 2021. On January 1, 2022, Tether’s market share was 47.5%. This value fell by 7.8% to 43.8% on July 1, 2022. Conversely, USDC’s market cap rose by 30.3% in the six months leading to July 1, surging from $42.2B to $55.0B. USDC’s market share also saw an astronomical increase of 42.1% from January to July 2022, rising from 25.6% to 36.3%.
The de-pegging of the asset escalated USDT’s situation on May 12
USDT’s concerning market situation was escalated by the de-pegging of the stablecoin, as it fell to an approximate value of 95 cents on May 12 amidst the Terra crisis. The stablecoin later struggled to get back to 99 cents the following day and traded on that level till July 18, when it reached $1.
USDT was launched in 2014 by blockchain firm Tether Limited. The stablecoin has since then grown to dominate the markets, positioning itself as the go-to option for investors who wish to convert their holdings to stable assets to avoid the volatility in the crypto space.
However, as its dominance keeps decreasing, we could see a new stablecoin king in the market if Arcane Research is anything to go by. However, the article noted that the prediction does not serve as an authority to be cited due to varying factors that could change in the future.