Circle's USDC outflows have exceeded $10 billion since the SVB collapse, Tether dominance is rising

Circle's USDC outflows have exceeded $10 billion since the SVB collapse, Tether dominance is rising

Weeks after the collapse of a number of US banks as well as the Credit Suisse chaos, the crypto market has recovered significantly, but the same cannot be said for a prominent stablecoin that has served as the backbone for DeFi trades – USDC.

Confidence in the Circle-backed stablecoin remains severely dented as investors continue to flee to Tether (USDT), the controversial stablecoin, in search of a safety net amid turmoil.

USDC outflow

USDC's market cap fell over 42% to $33.2 billion from its all-time high of nearly $57 billion last June. The downturn was driven by a $3.3 billion exposure to Silicon Valley Bank (SVb), which temporarily pushed the token down to 88 cents instead of its usual one-dollar price.

Parent company Circle has expanded its relationship with BNY Mellon to help with USDC redemption, which already offers custody services for its reserves. A few days later, the firm announced that “substantially all” of the cash portion had been transferred to the custodian bank, excluding limited funds held with transaction banking partners. While these measures helped the token regain its peg, massive outflows continued.

Since the SVB collapse on March 10, USDC net outflows have exceeded $10 billion. Rival USDT, on the other hand, is hovering near its record highs of nearly $80 billion in market capitalization and has achieved its most significant market share since May 2021. USDT now accounts for 60% of all stablecoins in circulation

Among other stablecoins, BUSD suffered a similar fate as it plummeted from its ATH of nearly $30 billion to $7.69 billion. The numbers reflect a decline of over 67% in less than four months.

USDC expansion

Circle has pushed for the expansion of USDC across multiple blockchains. Earlier this week, the stablecoin issuer announced the expansion of the token to Cosmos via the Noble network.

While the details surrounding the launch have not yet been announced, the team behind Noble is claims that USDC will be the first native fiat-backed stablecoin that is highly liquid and fully collateralized on a network connected to the Cosmos Inter-Blockchain Communication Protocol.

The announcement further states that over 50 IBC-enabled blockchains will be able to access the stablecoin for the first time.

“This integration will catalyze hundreds of millions of dollars of liquidity into Cosmos in the coming months and seek to address the challenges users and application chains face when interacting with bridged assets originating from other ecosystems.”

.