Tether still dwarfs the dollar-pegged USDC. But it’s starting to catch up at a faster rate.
Upon the announcement, the market cap of USDC jumped up by $53 million to $2.791 billion, according to metrics site CoinMarketCap. The coin, which is now the 13th largest by market cap, traded $566 million in the past 24 hours. What’s more, at this pace, its growth now exceeds that of its chief competitor Tether (USDT), even if Tether’s overall market cap is still far larger.
USDC has boomed this year. In January, the market cap for the coin was $473 million. Its market cap—a proxy for how much US dollars people have invested in the coin—started rising amid the mid-March coronavirus market crash. It hit $700 million by April. This is likely because people wanted to move their crypto-holdings to more stable assets, such as the US dollar.
Things really took off for the coin during this summer’s decentralized finance (DeFi) craze, when investors poured billions into non-custodial exchanges and lending protocols. Starting around the end of June, lots of these protocols offered customers the chance to make massive returns from staking USDC in their smart contracts.
And stake they did: On June 19, the market cap for USDC was $732 million. It peaked at $2.8 billion—about a 4x increase—last Sunday.
USDC’s main competitor is Tether, also known as USDT. That coin’s market cap has more than doubled since May, from $7 billion to $15 billion today, according to data from CoinGecko. That means USDC is growing faster than Tether, but that USDT is still dominates the market.
As “official chains” of USDC, the blockchains support the USDC coin and offer businesses various USDC-based APIs. USDC launched on Ethereum, pushed its Algorand integration live earlier this year, its Solana launch today, and it will support Stellar at the start of next year. Is this enough to put USDC in pole position?