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How USDC has gained from ongoing BUSD chaos

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How USDC has gained from ongoing BUSD chaos

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  • USDC witnessed interest from Genesis and other institutional investors.
  • BUSD and USDT lagged in terms of transfer volume.

According to data provided by Dune Analytics, trading firm Genesis had a massive amount of USDC in its reserves. The increasing interest of these firms could be instrumental in helping USDC compete in the stablecoin space.

33.0% of Genesis’s trading portfolio consisted of USDC, coming second only to its Ethereum [ETH] reserves.

Source: Dune Analytics

Institutional interest

However, Genesis was not the only institutional investor interested in USDC. Many other whales also bought the stablecoin, causing a pike in the percentage of USDC held by large addresses.

However, contrary to USDC, whale interest in USDT declined materially during the same period, according to Santiment. BUSD also observed interest from whales. However, the interest started to falter after the regulatory issues began with Paxos.

 

Source: Santiment

However, there have been attempts to improve the state of BUSD. For instance, since 13 February, $5 billion worth of BUSD was burned. Despite this, BUSD’s market cap continued to decline.

At press time, USDT was still on top of the stablecoin throne in terms of market cap, with USDC coming in second. However, as interest in USDC grew, the hierarchy of stablecoins might change. One indicator of USDC’s growth would be the high number of transactions being made on USDC.

According to data provided by Dune Analytics, 70% of all transfer volume was due to USDC. The huge number of transfers being made with USDC has given Circle’s stablecoin a clear advantage in this area. With USDT trailing behind at 19.3%, it seemed unlikely that USDT would catch up with USDC anytime soon.

Source: Dune Analytics

No new addresses

Even though there were sectors where each stablecoin showed dominance, there was one area in which all stablecoins could not show growth.

According to Santiment’s data, the network growth of USDT, USDC, and BUSD declined over the past month. A decline in network growth implied that the number of times each stablecoin was being transferred by new addresses had decreased. This indicated new addresses were not showing much interest in any of the stablecoins at press time.

Source: Santiment

A decline in new addresses transferring stablecoins would affect the state of the space negatively in the long run. It remains to be seen how things will pan out for each of these stablecoins.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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