Withdraw more than $10 billion in USDT as Stablecoin crisis continues

The uncertainty surrounding stablecoins started with the UST crash and inevitably spilled over to others like USDT. This uncertainty continued in the weeks following the collapse, driving investors out of stablecoins. In the aftermath of the UST collapse, USDT became the most challenging stablecoin in the space, with billions of dollars being redeemed within weeks.

$10 billion leaves USDT

In the past two weeks, investors have withdrawn more than $10 billion in USDT. This caused the digital asset’s market cap to drop to $75 billion in two weeks. Most of this came from fears of the UST losing its peg and dropping to the current trading $0.06. As a result, many investors have lost billions of dollars in the past few weeks.

Read Related | Another Stablecoin Strikes After UST Collapse

This clash necessitated further regulatory scrutiny into stablecoins and their ability to peg and protect investors in the process. Terra Network founder Do Kwon was at the center of this investigation while the South Korean government was trying to figure out what was wrong.

USDT continues to be the subject of various challenges in the market. It initially succumbed to these issues when the value dropped to $0.95. He recovered shortly thereafter. However, more than $1 billion in USDT was withdrawn on Friday alone, causing damage.

USDT Total Market Cap Chart on TradingView.com

USDT loses $10 billion in two weeks | Source: Market Cap USDT on TradingView.com

Stablecoins still in the game

Despite all the recent challenges, most stablecoins still hold their place. The biggest ones like USDT, USDC and BUSD are still doing very well and are still favored by investors looking to avoid extreme volatility in the crypto market.

As of this writing, stablecoins are still the top 10 cryptocurrencies by market capitalization, ranking 3rd out of 10. The worst hit since the UST crash, USDT still holds its position as the largest stablecoin in the market at $73.2 billion. It is also the third largest cryptocurrency by market cap after Bitcoin and Ethereum.

Read Related | Do Kwon warns Terra community not to use LUNA Burn addresses

USDC and BUSD also maintain their respective positions. Circle’s USDC is $53.2 billion, making it the second-largest stablecoin and fourth-largest cryptocurrency by market cap. Binance USD currently stands at $0.9995, with a market cap of $18.3 billion. This market cap is ahead of favored by markets like Cardano, Solana, and Dogecoin.

However, USDC is the only stablecoin that continues to hold a value of $1 of the three. Both USDT and BUSD are still trading below $1, including DAI, a decentralized stablecoin.

Featured image from TODAY, chart from TradingView.com

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