Click the tags above for all related articles
Turmoil in the dollar-backed cryptocurrency world has helped tether, the largest stablecoin, to increase its lead.
So far this year, tether’s market cap has risen 10% to $73 billion while that of its chief rival, USD Coin, fell by more than 11% to $39 billion, according to CoinMarketCap data. Binance USD has fallen by almost half to just over $8 billion.
Traders are relying on tether more than ever now that Circle Internet Financial’s USD Coin has broken from its peg and New York regulators have shut down new U.S. issuance of the world’s third-largest stablecoin, Binance USD.
Crypto investors flocked to tether over the weekend after USD Coin dropped sharply below its fixed value of $1. Circle had more than $3 billion in reserves—significantly above the amount guaranteed by the Federal Deposit Insurance Corp.—that were backing the coin tied up in the collapsed Silicon Valley Bank.
As traders rushed to convert their USD Coin for tether, demand for tether was so strong that the stablecoin continued to trade slightly above its $1 peg on Coinbase, Binance and other centralized exchanges on Monday, according to Kaiko, a digital assets data and information services provider.
The shift away from USD Coin, which markets itself as the most transparent and regulated stablecoin, marks a sharp reversal of market conditions last year when the collapse of algorithmic stablecoin TerraUSD spooked investors, leading them to redeem billions of tether and switch to USD Coin.