Despite the recovery of the crypto market after the failure of several US banks and the Credit Suisse chaos, one prominent stablecoin that has served as the backbone for DeFi trades, USDC, has not fared well. The confidence in Circle-backed stablecoin remains severely battered as investors continue to flee to Tether (USDT) in search of a safety net amidst the turmoil.
USDC’s market cap has plummeted by over 42% to $33.2 billion from its all-time high of nearly $57 billion last June due to a $3.3 billion exposure to Silicon Valley Bank (SVb), which temporarily caused the token to drop to 88 cents instead of its usual one-dollar price. Circle expanded its ties with BNY Mellon to assist with USDC redemption to help the token regain its peg, but massive outflows continued. Since SVB’s collapse on March 10th, net outflows of USDC have exceeded $10 billion.
USDT, on the other hand, has been hovering near its record highs of nearly $80 billion in market cap, representing 60% of all stablecoins in circulation.
Among other stablecoins, BUSD suffered a similar fate, plunging to $7.69 billion from its ATH near $30 billion.
Circle has been pushing for USDC’s expansion across several blockchains and has announced the expansion of the token to Cosmos via the Noble network. Over 50 IBC-enabled blockchains will be able to access the stablecoin for the first time. USDC will be the first native, fiat-backed stablecoin that is highly liquid and fully collateralized on a Cosmos Inter-Blockchain Communication Protocol-connected network. The integration is expected to catalyze hundreds of millions of dollars in liquidity in Cosmos in the coming months and will seek to rectify the challenges that users and appchains face when interacting with bridged assets sourced from other ecosystems.
“This integration will catalyze hundreds of millions of dollars in liquidity over the coming months in Cosmos, and will seek to rectify the challenges that users and appchains face when interacting with bridged assets sourced from other ecosystems.”
Despite these efforts to expand USDC, it remains to be seen whether it can regain the trust of investors and recover from its recent downturn.