- USDT and USDC surge by nearly $3 billion amid crypto market downturn
- Tether’s USDT recorded $1.5 billion in deposits, while Circle’s USDC recorded $820 million.
The entire cryptocurrency market collapsed on Monday despite its previous strong performance. Earlier this week, the global stock market crash sent all cryptocurrencies lower. However, stablecoins defied market expectations throughout the week.
Indeed, the stablecoin sector has seen an increase in market cap and supply, led by USDT and USDC.
USDT and USDC supply reaches $3 billion per week
Source: X
In the past week, the supply of Tether’s USDT and Circle’s USDC has surged to $3 billion. As the cryptocurrency market has been experiencing a continuous decline, the increase in supply indicates an increased need for dip buying. Therefore, when cryptocurrency prices fell, most investors rushed to buy the dips.
According to data shared by Lookonchain on X, Tether has sent $1.3 billion to exchanges and market markers since Monday’s crash. Look on Chain Taken note.
“Since the market crash on August 5th, $1.3 billion in USDT has been transferred from Tether’s treasury to exchanges.”
The surge in stablecoins has been ongoing since the beginning of the crypto market crash, driven by traders sending funds to exchanges. In fact, data from Cryptoquant revealed that USDT inflows to exchanges surged 181% between August 3 and August 6 during the market crash.
Source: CryptoQuant
Similarly, USDT deposits on Binance have grown exponentially, reaching $1.5 billion, according to data from defiLlama.
Additionally, USDC deposits into Binance hit a record $820 million in just three days.
Source: Defilama
Simply put, the data shows that the recent market downturn has turned all interested parties into net buyers, creating a buying opportunity.
The impact of increased buying pressure was seen 48 hours later when the market began to recover with strong gains across the board.
Market capitalization growth reaches record high
As supply increased during the market downturn, market caps also soared. Tether’s USDT market cap hit an all-time high of $115.4 billion after sustained growth over the past three months. Similarly, USDC has continued to grow since Circle became MICA compliant. Over the past week, USDC’s figure has increased by $1.6 billion to $34.48 billion.
Currently, USDC is at its highest annual price since the 2023 SVB collapse.
The surge has also been noticed by other crypto analysts, with David Alexander sharing his analysis on X:
“We saw some interesting USDC movement this week, increasing its total circulating volume by $1.56 billion (4.8%) after experiencing a steep decline in the face of market-wide headwinds. The bulk of these inflows occurred into Ethereum ($1.34 billion) and Solana ($356 million).”
Source: Defilama
Over the past year, stablecoins have grown steadily from $124.6 billion on August 10, 2023 to $165.4 billion at the time of writing. This is a sign of increased adoption, interest, and usage, which has led to growth for USDT and USDC.
