October 11, 2022
USD Coin (USDC), the stablecoin issued by Circle, has lost almost $10 billion in market cap over the past four months.Data from DeFiLlama shows that USDC peaked at $55 billion in June. However, since then, it has experienced an 18% decrease, with as much as 11% occurring just over the last 30 days.
One of the reasons why this might have happened is Binance’s decision to remove USDC from its platform last month. At the time, it was unclear whether this would have a negative impact on Circle’s stablecoin.
Back then, Circle CEO Jeremy Allaire wrote: “Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance.” However, it looks like that was hardly the case. Since the announcement of Binance on September 5, USDC has gone from a $51 billion market cap to $45 billion, with BUSD rising 15% to $21.5 billion.
In May, USDC had experienced serious gains after the collapse of Terra and its native stablecoin UST, as investors saw it as a safer token. Nevertheless, it is now sitting at January levels.
The stablecoin market is currently worth $148 billion, and has been quite flat in the past months. Tether’s USDT is the clear leader, with a market cap of $68 billion. USDT, USDC, and BUSD, all centralized and fiat-backed tokens, account for 90% of the total stablecoin market. This raises the question of how decentralized are all the networks that rely so heavily on these centralized stablecoins.