After losing $10 billion in three months, Circle’s dollar-pegged stablecoin USD coin (USDC) is inching back following the coin’s rise that benefitted from Terra’s collapse in May and the subsequent fallout of the overall market.
Circle’s surge from $48 billion to $56 billion that was erased by the market’s deep plunge is coming back, sparking redemptions in tether (USDT), the world’s largest stablecoin, Coindesk reported on Monday (Oct. 10), citing data source CoinGecko.
Still, the stablecoin’s market value remains at its lowest point in nine months.
See also: Unbacked Stablecoin’s Collapse Lost $48B; Crypto Says ‘Let’s Launch Two More’
“After Terra collapsed, there was a strong move to sell USDT and shift to quality, USDC, perpetuated by concerns that USDT was also heading to $0,” said Wes Hansen, director of trading and operations at Arca, per Coindesk.
“However, once the fears of USDT collapse subsided, investors began returning to stablecoins with the best market depth, which is usually USDT on non-U.S. exchanges,” Hansen said.
Read more: Has Tether Turned the Corner on Reserve Doubters?
Binance — the world’s third largest stablecoin — and tether are nipping at the heels and seemingly gaining ground on USDC, Coindesk reports. Binance USD showed an uptick in market value of 21% to $21.66 billion. Tether has gone up by 3% to $68.3 billion, per reports.
Several factors could be the reason for USDC’s downward spiral of market capitalization, including USDT stability, Tornado Cash sanctions and Binance’s recent decision to consolidate order books, per Coindesk.
Related: Circle Acquires Elements to Drive Crypto Payments
The safety appeal of USDC came from its reserve transparency and being overseen by U.S. monetary regulations whereas tether’s reputation was stained with controversy over reserves early on, according to the report. Regardless, tether stood up under the stress of Terra’s fall.
At one point the stablecoin’s peg fell as low as 92 cents on some exchanges following Terra’s crash, averaging about 99 cents in June and regaining a stable dollar peg in July.
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