Tether vs. USD Coin on-chain data reveals two very different stablecoins

Tether vs. USD Coin on-chain data reveals two very different stablecoins

Tether’s market cap fell amid the FTX fiasco, while USD coin supply surged by $2 billion, a stablecoin created by Circle Financials Ltd. based in the US takes the lead over its main competitor Tether USDTtickers down $1.00 when it comes to institutional adoption based on on-chain data.

USDC daily transfer volumes are higher

The market cap of USDC tokens in circulation is around $44 billion versus $65.42 billion for USDT. However, USDC’s daily transfer value on the Ethereum blockchain has consistently been higher than USDT throughout 2022, data from Glassnode shows. On November 22, for example, USDC’s daily transfer was approximately $14 billion compared to USDT’s $5 billion.

Tether vs. USD Coin on-chain data reveals two very different stablecoins

In other words, USDC users make relatively higher fund transfers than USDT users, suggesting that USDC is increasingly the stablecoin of choice among high-net-worth companies, including institutional whales, hedge funds, family offices, crypto exchanges, and others.

USDC also leads USDT in terms of its offering weight in intelligent contracts as of November 22nd. Remarkably, the former accounted for 33.75% of the stablecoins locked in staking pools. For comparison, the supply of USDT is around 12.50%.

Tether vs. USD Coin on-chain data reveals two very different stablecoins

Moreover, crypto trading platforms implementing the so-called post-FTX crash proof of reserves appear to be holding more tether than USD coins, suggesting that USDT is likely to be more popular among retail traders. These exchanges include Binance, KuCoin, BitFinex Stocks, ByBit, OKEx, and Huobi. Crypto.com is the exception, with more USDC than USDT.

Tether vs. USD Coin on-chain data reveals two very different stablecoins

Tether market cap dips after FTX collapse

After the FTX exchange crashed nearly two weeks ago, USDT’s market cap fell by nearly $4 billion. Tether briefly deviated from its $1 valuation, reaching 96 cents on Nov. 10 after freezing $46 million in USDT tokens related to FTX. Interestingly, after Nov. 10, when the FTX fiasco began, the USDC market cap increased by nearly $2 billion.

Tether vs. USD Coin on-chain data reveals two very different stablecoins

Tether has a history of breaking its peg to the US dollar during times of extreme market stress, albeit to a lesser extent in recent years.

For example, during the May crypto market sell-off, the token fell below 95 cents, coinciding with a surge in USDC’s market cap. This suggests that some investors transferred the capital from Tether to USD Coin after the former lost its USD peg, as illustrated below.

Tether vs. USD Coin on-chain data reveals two very different stablecoins

On the other hand, Tether quickly returned to dollar parity, claiming that the tokens in circulation are 100% backed by reserves and pegged one-to-one with USDs.

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