Last week, the crypto crash produced gainers and losers. The biggest gainer is the USD Coin based on market cap.
USD Coin had a market value of between $48 billion and $49 billion. This is at the outset of the fall on May 8, according to statistics from CoinMarketCap. However, it started rising again on May 11 after a very unnoticeable decrease. Now, it is presently at around $52.3 billion, close to its all-time high of $53.6 billion achieved in March.
Becoming 4th-largest crypto
Last week, when Terra and its UST stablecoin crashed, bringing along other cryptocurrencies, the crypto and stablecoin markets seemed to be precarious.
But the meltdown generated one biggest gainer in terms of market capitalization and reputation as well: the USDC stablecoin.
USDC padded its market value as UST approached zero and USDT (Tether) processed billions in redemptions.
USDC, the fourth-largest cryptocurrency by market size after the crisis, is also narrowing the gap on Tether’s USDT, the top centralized stablecoin.
Tether’s market worth has dropped by almost $7 billion from its peak of $83 billion on May 11.
Not only algorithmic stablecoins are at risk
Circle and Coinbase created the Centre Consortium, an organization to assist in administering USDC. This organization declared in August 2021 that only cash and U.S. Treasuries would back the stablecoin.
However, Circle has never disclosed complete audits, and some opponents assert that such attestations are not worth the paper they’re written on.
Nonetheless, Circle is capitalizing on concerns over stablecoin redemption.
Circle’s Chief Strategy Officer Dante Disparte, in a May 12 blog post titled “The Importance of Being Stable,” was cautious about emphasizing that not only algorithmic stablecoins are at risk of financial risk, but other stablecoins as well. USD Coin may continue as the biggest gainer as long as institutions support its technology.
“They may also may be present in larger asset-referenced stablecoins (what the Europeans are labeling as Systemic Asset Referenced Tokens, or SARTs in the Markets in Crypto-Assets Framework) where collateral and the composition of reserves is too opaque to inspire confidence or too correlated with illiquid assets with questionable credit quality to endure periods of stress,” he stated in the Circle report.