- Market dominance of Tether (USDT) rose to its 22-month-high of over 60.5%.
- True USD (TUSD) spiked over 172% since the start of 2023.
Q1 2023 goes down as the period that recorded significant recoveries in the cryptocurrency market. Bitcoin, Ethereum, and other altcoins displayed astounding rallies amid bank runs and Fed’s regulatory crackdown. Out of them all, stablecoins captured the major attention.
The USDC brief depegging, due to Silicon Valley Bank (SVB) collapse, caused the combined market capitalization of the top 5 stablecoins to hit a 28-month-low of $124 billion. Especially, the Circle-issued stablecoin USDC went through an outflow of $10 billion. While the Paxos-issued Binance USD (BUSD) shed nearly $500 million post-CFTC lawsuit.
Paxos-issued stablecoin Binance USD (BUSD) got stuck in lawsuits with SEC and CFTC. The regulator tagged BUSD to be an unregistered security. In the end, Paxos had to halt the minting of BUSD. Consequently, crypto exchange Binance and the rival Coinbase delisted the stablecoin.
| Top Stablecoins | Market Cap Gain/Loss in Q1 2023 |
| Tether (USDT) | + 20.3% |
| USD Coin (USDC) | – 27% |
| Binance (BUSD) | – 54.7% |
| Dai (DAI) | – 8.15% |
| True USD (TUSD) | + 172.6% |
Amid these declines, the stablecoin market also witnessed this quarter’s huge surge. The market cap of the fifth-largest stablecoin, True USD (TUSD), picked up a massive momentum of over 172%. The total value of the TUSD supply was $755.47 million on Jan 1 and crossed $2.06 billion at press time. One reason for the surge was Binance’s switch from BUSD to TUSD for its zero-fee Bitcoin trading.
However, these hardships of USDC and BUSD favored the largest stablecoin Tether (USDT) to soar in the crypto market. Remarkably, USDT claimed its 22-month-high market dominance of over 60%.
Bitcoin’s Surge and Stablecoins’ Recovery Synced?
The biggest crypto crash – the Terra collapse – was initiated due to the depegging of the once-third-largest stablecoin USTC. Eventually, it led to a steep decline in the crypto market. However, 2023 displayed a relief rally in crypto prices. Hindering this bullish rally, the USDC short-lived crash recorded notable downside slopes on charts. But countermeasures were implemented to aid the recovery.
As per the above chart from Santiment, the drop slowed down and began hinting at the possibility of a gradual rise. The pattern also detected a sync between the consolidated phase of the top stablecoins with Bitcoin’s price action.
Moreover, Santiment’s analysis predicted that an upside recovery in market caps of the top 5 stablecoins could bolster the “probability of Bitcoin rising.”
NewsCoinToday | Synthetic
