The second largest stablecoin with a market cap of $32.5bn, USDC’s adoption level has been slowly slipping downward recently as the Circle-issued token sees its redemptions increasing. The recent concerns first began when Circle announced that it held around $3.3bn at now-bankrupt Silicon Valley Bank, causing USDC to briefly de-peg from the USD. SVB depositors were later informed their deposits will be sent back in full, but the confidence in the stablecoin seems to have been shaken.

What’s going on with USDC?

Over the last month alone, USDC’s market cap has fallen by a staggering $10bn. From Wednesday to Thursday last week, the total value of tokens redeemed for USD over the 24 hour period reached $463m. The company’s CEO took to Twitter to try and alleviate the concerns of token-holders – highlighting that 1 USDC has always been redeemable for 1 USD despite heavy outflows. Despite confidence in the token fluctuating, analysts have said that USDC remains the dominant stablecoin for DeFi protocols, despite the overall dominance of Tether.

Speaking of Tether…

That’s who Circle is losing its market share to. Over the same month that USDC’s market cap shed $10bn, the market cap of Tether’s USDT gained roughly $8.5bn – suggesting that USDC’s outflows are not general concerns for the stablecoin space as a whole, but specifically for USDC. Now at a market cap of almost $80bn and a market share of nearly 60%, Tether’s dominance of the stablecoin space is now at a 22-month high, and it doesn’t show signs of loosening its grip on the market any time soon.