USDC Market Cap Falls by $10 Billion in Two Weeks
The second-largest stablecoin, USDC, has experienced a dramatic $10 billion decline in market capitalization over the past two weeks.
Sharp Decline in USDC Market Cap
According to CoinGecko data, USDC's market cap plummeted by $10 billion in the last two weeks. The most significant drop occurred between March 10 and March 12, when the market cap of the stablecoin fell from $42.5 billion to approximately $36 billion. Since then, USDC's market cap has continued to decrease, now standing at around $32.5 billion.
This decline coincided with a severe depeg, where USDC dropped to $0.87 due to the fallout from the collapse of Silicon Valley Bank. Although Circle, the issuer behind USDC, managed to recover $3.3 billion trapped at the bank and stabilize USDC back to $1, the ongoing decline in market cap indicates a diminished market confidence in USDC.
On March 15, Circle also recorded the largest-ever conversion of USDC back to cash.
Chart: USDC Market Cap Decline. Source: CoinGecko
USDT Takes Advantage of USDC's Weakness
In response to USDC's weakness and regulatory pressures on BUSD, the largest stablecoin in the market, USDT, has issued an additional $8 billion in USDT since early March. This increase is partly driven by a surge in demand from investors seeking safe havens in the current market environment. Tether, the issuer of USDT, is projected to earn $700 million in Q1, bringing its total excess collateral to over $1 billion.
