While the downfall of TerraUST sent shockwaves across the crypto market, stablecoins are still a very popular choice among investors with Tether’s USDT and Centre’s USDC competing closely.
Currently, USDT is number three by market capitalization and USDC is following closely at number four.
A recent research by Arcane predicts that USDC will take over USDT’s spot by October 10th, 2022.
Tether had a market share of 47.5% in the beginning of 2022, while USDC had 25.8%. However, Tether’s popularity has reduced since, reducing its market share to 43.8%. USDC on the other hand, increased its dominance to 36.3%.
Arcane researchers believe that this shift in market share took place due to the decrease in supply of USDT, after it de-pegged following Terra’s crash. Investors acquired USDT at a discounted price of $0.95, and redeemed it for $1 at a later time.
Arcane’s prediction sees 70.4% market share for USDC and -28.7% for USDT by October. They also warn that these numbers are only estimates and can fluctuate greatly due to the uncertain market scenario.
The research also highlights a few other reasons which lead to a reduction in USDT’s market share.
Tether is not very regular with its audits and is thus criticized for not being very transparent with its investments and reserves.
USDC is regularly audited and is more transparent with its reserves, making it easier for investors to trust it. Moreover, USDC’s parent company, Centre (a consortium of Circle and Coinbase), has an audit on a monthly basis.
Read Also: Circle Reveals $55.7 Billion in Reserves for its Stablecoin USDC
While countries across the world are trying to establish a rule book for regulation of stablecoins, only time will tell which stablecoin comes out on top.
