Tether Circulation Hits New Peak as Confidence in Circle Continues to Shrink

The stablecoin ecosystem has also been affected by the US war on cryptocurrencies, with a clear divergence occurring between the two largest issuers.

Cord supply has reached an all-time high of $83.36 billion, according to company transparency a report. Industry analyst Will Clemente commented:

“The difference from USDC is striking, reflecting the ease of access to Treasury notes for US-based USDC holders and the regulatory uncertainty for US-based Circle.

What was once a competitive advantage for USDC is now the opposite.

Tether traded just reached ATH of $83.35 billion

The difference from USDC is staggering, reflecting the ease of access to Treasury notes for US-based USDC holders and the regulatory uncertainty for US-based Circle. What was once a competitive advantage for USDC is now the opposite. pic.twitter.com/OcExkpZqAW

– Will Clemente (WClementeIII) June 11, 2023

The rope keeps the coin

USDC has been favored by institutions, but as the industry-wide crackdown continues, demand for the stablecoin is waning.

Moreover, Circle was badly affected by exposure to the now bankrupt Silicon Valley bank. The US dollar was de-pegged at the time in early March, which caused a huge loss of confidence.

USDC supply has fallen by almost 50% since June 2022, when it peaked at around $56 billion. As a result, its market share also took a hit, dropping to 22%, while that of Tether increased to 64.5%.

The total market capitalization of stablecoins is currently $129.3 billion, according to CoinGecko. It represents roughly 12% of the entire cryptocurrency market cap though it also shrunk significantly during the bear market.

On June 12, Glassnode reported that USDT and USDC continue to leave centralized exchanges, with both stablecoins hitting monthly highs in outflow volumes.

📈 USDT dollars Exchange inflow volume (7d MA) reached a one-month high of 32,508,950.195 USDT

Scale width:https://t.co/D90kNIpU2J pic.twitter.com/2XsLdprSgx

– glassnode alerts (@glassnodealerts) June 11, 2023

The flight to safety from exchanges, especially Binance, has intensified in the wake of the SEC’s dual lawsuits and enforcement actions last week.

However, Binance CEO Changpeng Zhao to caution Investors don’t read much into Binance’s outflow numbers from the analytics platform because it uses TVL (Total Value Locked), which includes price drops for crypto assets.

Crypto Market Outlook

Cryptocurrency markets calmed down over the weekend as the consolidation process continued. There was virtually no change in total capitalization over the past 24 hours, standing at $1.09 trillion.

Bitcoin prices settled at $25,800, while Ethereum is marginally lower at $1,735 at the time of writing.

Unsurprisingly, BNB is the hardest hit, losing 25% over the past week. Binance Coin is trading at its lowest price this year at $222, after dropping another 5% at the time of writing.