Why USD Coin remains under Tether’s shadow despite growing interest

After Terra’s UST collapsed, there was a pointy concentrate on dollar-pegged stablecoins. There are in reality fears that one other de-pegging might pose systematic dangers for all the crypto market. Nonetheless, USD Coin has emerged as one of many key alternate options to Terra’s UST. Here is why:

• USD Coin is managed by a verified consortium of consultants.

• USDC can also be backed by {dollars} which are literally held bodily in reserve.

• The stablecoin can also be backed by different reserve belongings together with US treasury payments.

Data Source: TradingView 

Why is USD Coin behind Tether?

With the attributes listed above, it’s clear that USD Coin has all of the makings to change into an enormous stablecoin. In truth, its market cap has been growing, particularly after the collapse of Terra UST. However, there are some indicators that USDC isn’t growing as quick as its market cap suggests. 

For occasion, USDC liquidity on Uniswap, one of many largest DEX on the earth, has dropped considerably in latest months. High liquidity on a platform like Uniswap typically signifies {that a} stablecoin is in excessive demand. The indisputable fact that USDC is dropping is a priority. 

We are additionally seeing the biggest wallets favoring Tether. In truth, analysis by Glassnode notes that the proportion of USDC held by 1% of the biggest crypto wallets is at a one-year low. While this isn’t a large enough concern, it suggests that there’s restricted demand for the coin.

Is USDC dealing with De-pegging dangers?

At the second, there may be nothing that signifies USDC is dealing with any doable threat of de-pegging. The UST collapse after all has put buyers on edge. But thus far, USDC has managed to take care of a secure peg on the greenback. 

It is unlikely we’re going to see any de-pegging quickly. However, one factor we may be positive about is that USDC is years away from competing with Tether.