- USDC’s supply has surpassed USDT’s on Ethereum.
- USDT’s total supply on all blockchains remains higher than USDC’s.
- DeFi and Blockchain are the major driving factors.
- Constant upward shifts in the market have caused the phenomenon.
For the first time in the crypto industry, the total supply of USDC on Ethereum has surpassed that of USDT’s. The former’s supply stands at 39.92 billion and of the latter at 39.82 billion, according to Etherscan. However, the broad view hasn’t changed, and the entire provide of USDT’s across all blockchains is higher than that of USDC’s. The former is ruling with a supply of over 82 billion dollars, whereas the latter stands at approximately 45 billion dollars.
The stablecoins are available on several blockchains, such as Solana and Alogorand. This new record of USDC surpassing USDT is significant as blockchain is the primary contributor to their growth.
DeFi Driving the Growth
Stablecoins like USDC are used to do business on decentralised exchanges and other purposes that lie within DeFi protocols. So, the high usage of USDC in the decentralised finance (DeFi) market is a significant element among others that have contributed to its recent growth.
A Circle spokesperson said to the Block that the recent shift in market movements has also contributed to this phenomenon. He stated, “As digital asset markets trend up or down, both scenarios tend to generate increased demand for USDC — especially during significant market moves.”
The spokesperson explained that when markets shift upwards, it increases the interest of the investors, which in turn causes an elevated demand of USDC as a method to lead fiat currency into crypto trading platforms.
Whereas when the market faces a downward shift, merchants prefer selling volatile assets into USDC, which also, in a way, increases the demand for stablecoin.
The scenario for USDT is different from its competitors as its growth in demand depends mainly on centralised exchange users and institutions. Tether CTO Paolo Ardoino told the Block that USDT relies mainly on DeFi platforms to boost their supply.
Although, with the recent bearish crypto market sentiment, decreasing demand for USDT from institutions and retail buyers have been noticed. Ardoino also stated that contrary to this, demand from Turkey and other countries in Latin America is on the rise.