Evening
Nothing is immune to the ongoing crypto winter, not even stable coins. We have already seen Terra ecosystem collapsing as its stable coins UST de-pegged and went into a death spiral. Other stable coins like Tron's USDD and Abracadabra's MIM are also facing difficulty maintaining peg.
Tether's USDT the largest stable coin and third largest crypto by market cap is also losing the market share with its market capitalization falling to the lowest in last eight months, as overall crypto market cap fell below $1 Trillion since February 2022.
Currently USDT stands at a market capitalization of $68.1 Billion, for the first time since October 2021. USDT market cap have experienced a cascade decline since the March's all time high of $83.2 Billion and all this happened following the Terra's UST demise.
On the other hand, USDT's biggest competitor, Circle's USDC which is the second largest dollar pegged stable coin is gaining ground sharply. USDC's market cap has grown from mid May's low of $48.3 Billion to a current value of $55.33 Billion. USDC have never crossed USDT in terms of market cap but if the ongoing trend persists it may do so pretty soon.
Tether on the other hand is continuously posting statements reassuring the investors that USDT have not been impacted by the recent stETH lending crises. Tether has already distanced itself from the ongoing issue on lending platform Celsius and clarified that it would not impact USDT reserves. Moreover Tether also hinted at plans to get rid of commercial papers backing USDT.
But considering Tether's history regarding transparency around its operations and assets backing USDT; the assurances, clarifications and plans may not prove enough to assuage the the panicking investors. We have already seen this happening with Terra UST, panic selling turning into a domino effect and eventually bringing the whole ecosystem down.
Even though I am not a big fan of USDT or other stable coins, but still Tether going down will be a major blow to the whole crypto ecosystem. Crypto world is still finding it hard to recover from the UST demise and Tether's faltering might prove to be the last nail in coffin.
Thoughts?