Tether dominance is approaching all-time high, since crypto crashes

Tether dominance is approaching all-time high, since crypto crashes

The market dominance of the leading stable coin Tether (USDT) approaches an all -time high, since the cryptoma markets suffer from the obvious collapse of FTX.

Almost $ 70 billion in USDT currently circulating in the crypto ecosystem, which makes up almost 9 % of the total market capitalization of digital assets.

Although it is just below his record high of 9.49 %, the dominance of the USDT rose by 25 percentage points last Friday. That was shortly before Changpeng Zhao, CEO von Binance, gave shots on the rival crypto billionaire Sam Bankman-Fried.

ZHAO said on Saturday that he would soon invest millions of dollars in FTX's natives token FTT, which culminated in yesterday's shock offer to fully take over the FTX.com exchange from Bankman-Fried.

Usdt praised a higher offer, a few months before the historic Tether-Bank run in the wake of the failed algorithmic competitor Terra at the beginning of this year. But Usdt only made half as much of the cryptor room at the time, about 4.5 %.

It is clear that investors flee to the safety of tokens stages at US dollars. Bitcoin, the largest cryptocurrency after market value, has fallen by 20 % in the past five days and 15 % in the last 24 hours alone, which corresponds to nominal losses of $ 49.1 billion.

The market capitalization of BTC is now $ 327 billion, the lowest level in more than two years; Its dominance is almost 41 %. In December 2020 it was even 71 %.

ether number two has developed a little worse, as so often and fell by almost 30 % in the same period. ETH accounts for less than 18 % of the market for digital assets, which corresponds to the average of the previous year.

The market dominance of Tether's direct rival USDC has also increased by 25 percentage points since the weekend - from just over 4 % to almost 5.3 %. Now USDC worth $ 42.7 billion-$ 11 billion less than in early August than the offer of an all-time high of almost $ 56 billion.

USDC growth turned around

The market share of USDC had benefited greatly from the downfall of Terra. For a few short weeks in May and June, StableCoin junkies have redeemed their Tether of $ 8 billion, which represents the largest reduction in the USDT offer in history.

all of this, while the USDC offer floates with a similar amount, which corresponds to growth of about 15 % in one month. These trends have now been reversed, with Usdt adding an offer of almost $ 5 billion in the past three months.

Like all other margins, USDC and USD out more token if the demand from large actors grows-players such as Z and others Common dealers, including the FTX sister company Alameda Research. Conversely, they burn token when these companies redeem stable coins for raw dollar, whereby the ability of the issuers to deal with storms is the key to consumer confidence.

Binance also painted the trade fees for Bitcoin and Ether, which seems to have inspired the market share of the stock exchange together with that of Busd. While USDC was busy burning his offer because customers redeemed token against cash, Busd spent an additional $ 5.1 billion, which corresponds to growth of almost 30 % in three months.

The market dominance of Busd - even though still much smaller than USDT and USDC - has increased by 31 percentage points from around 2 % to 2.6 % today. But Clara Medalie, research director at Kaiko, assumes that the slowdown of activity in the protocols for decentralized finances (Defi) is more responsible for the throttling of USDC growth.

medalie explained that USDC is the most frequently used stable coin in defi, with a larger blocked total value than both Tether and Busd.

"UsDC had never had high volumes on centralized stock exchanges in the past, so the decision of Binance to abolish trade fees and convert USDC deposits automatically had probably only limited effects on the overall market capitalization," said Medalie.

tether, a gray veteran, ready for the StableCoin War

Regardless of this, USDT remains number one below the stable coins. And in view of the current market crash, the dominance of Tether is practically as high as never before (not to mention his Share of the StableCoin market, the offer of which more than 48 % of all in the process constitutes stable coins).

The continuing success of Tether comes despite on his back, flutting off with promised audits, stop complain with the New York Atorney General, alongside A countless from operational warning signals that go back for years.

For this purpose Binance in August This begins to offer monthly breakdowns of his reserves over the actual issuer of Busd, Paxos. According to his latest , Busd is completely due to US US treasure bonds covered, the latter in the form of reverse pension business. Treasuries are also strongly represented usdt and USDCS Reserves.

Raman explained that the hard competition on the StableCoin market is that large crypto operators recognize that stable coins offer an excellent business model. The winning stablecoins will have an enormous advantage both in the crypto ecosystem (with defi introduction) and in the traditional ecosystem, since companies, retailers and funds do business with stable coins.

"Therefore we predict an era of the 'StableCoin Wars' in which there is a healthy competition for stable coin dominance," said Raman.

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The contribution Tether Dominance Nears All Time High as Crypto Crashes is not a financial advice.