Recall that in early September, Binance announced that it would convert USDC, USDP, and TUSD stablecoins to BUSD. The crypto exchange had said the move was aimed at improving its capital liquidity and efficiency. The CEO of Circle, which is the issuer of USDC, had claimed that this would benefit the stablecoin. According to him, “this change would likely lead to more USDC flowing to Binance”. But, has this been the case so far?
USDC market cap fell 12%
So far, no data confirms the theory issued by the CEO of Circle in September. Indeed, the change made by Binance does not seem, for the moment, to benefit the USDC. Recall that the day the exchange announced the change, a Twitter user suggested that it was a strategic decision. Indeed, he said that “Binance is removing competitors like Google did 10 years ago“.
In fact, since the stablecoin USDC is automatically converted to BUSD on Binance, it has lost 12% of its market capitalization. This last one is increased to $46 billion, this Monday. This is the lowest level for the crypto since January. Note that the stablecoin BUSD gained 12% while its competitor lost 12%.
Still, the USDC stablecoin had experienced a 7-week rally from May to June. This rise had propelled its market capitalization above $56 billion, an all-time high. The rise came right after the collapse of Terra’s UST. So, crypto investors had turned to USDC upon realizing that Terra was on the verge of extinction.
Since September 29, the Binance crypto exchange converts USDC, USDP and TUSD balances into BUSD. From the start, this change affected the structure of the stablecoin markets. It had a real impact on the market capitalization of USDC, even though the latter managed to maintain its place as the second largest stablecoin. Meanwhile, there are hopes that USDC will succeed in taking the place of USDT, to become the largest stablecoin.
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