3 The reasons why the drop in the market value of the USDC stablecoin is below $ 50B is Tether

on the other hand, the main competitor of Tether Stablecoin demonstrated the growth of market value.

The market capitalization of USD Coin (USDC), a stable coin released by the American payment company Circle, for the first time since January 2022, fell below $ 50 billion. On a weekly schedule, the market value of the USDC, reflecting the number of tokens secured by US dollars, fell on September 26 to 49.39 billion US dollars, which is almost 12% lower than the record maximum of 55.88 billion US dollars, set only three months ago .

weekly graph of the market value of USDC against USDT. Source: TradingView On the contrary, the market value of Tether (USDT), which in May risked to give in USDC its first place among stable coins, on September 26 exceeded $ 68 billion, although it decreased by 17.4% compared to a record maximum of $ 82.33 billion in May 2022. The discrepancy between USDT and USDC shows that investors again prefer the first. Let's look at the factors that help strengthen Tether's positions as a leading stablecoin.

USDC suspension by Binance ## Binance, the world's largest cryptocurrency exchange in the volume of trading, announced earlier in September that it would convert the residues of the USDC to its own stabilcoin, Binance USD (Busd). The conversion will begin on September 29 and does not apply to USDT. The exchange said that she wants to "increase the liquidity and efficiency of capital for users" by all, apparently, forced conversion in conditions of growing competition in the sector of stable coins. As a result, Binance suspended the Sports, futures and marginal trade of USDC. 8/ 1. The forced "car converters" of Binance is a blatant monopoly behavior of a typical fintech company. They are no better than traditional banks that have the right to freeze or take control of user funds. Where is the decentralized future, which was promised to #Web3 users? - Momentum 6 (@Momentum_6) September 21, 2022 Since the announcement, the market value of the USDC has fallen by $ 9.5 billion. Following in the footsteps of Binance, the Indian cryptocurrency exchange also stopped the USDC deposits since September 26. Similar: Binance: There are no plans for the automatic Tether conversion, although this "can change."

Whales abandon the USDC after a fiasco Terra

according to data collected by Glassnode, the USDC sentence, belonging to the addresses of the upper 1% (they are “whales”), decreased to 88.36% in September from a maximum of 93 a year of 93 , 84% in February.

## Office USDC, held by the addresses of the upper 1%. Source: Glassnode It is interesting that the fall accelerated after the Terra project collapsed in May, the "algorithmic stabilcoin" worth $ 40 billion, causing negative sentiments in relation to the entire stablecoin industry. For example, according to Cryptoquant, the total market value of all stablecoins survived the strongest correction in 2022, falling from the February maximum of $ 97.37 billion to $ 80.65 billion in September.

The reverse proposal of all stablecoins. Source: Cryptoquant Sanctions Tornado Cash The fall in the market value of the USDC accelerated after the US Treasury imposed sanctions against the Tornado Cash cryptocurrency service due to suspicions of money laundering. Circle responded to the sanctions by freezing all USDC wallets belonging to Tornado Cash. The company also prohibited addresses that can be associated with a prohibited mixing service, use USDC. In contrast, Tether avoided making Tornado Cash addresses in the black list. Independent market analyst Geralt Davidson regarded Circle's reaction to Tornado Cash as a sign that USDC storage is more risky compared to stable-mascoons. "Now people realized that it was more risky to hold the USDC, Circle has blacklisted all the USDC at Tornado Cash addresses that fell under the sanctions of the US Ministry of Finance," he said in August 2022, adding: adding: adding: adding "It seems that the USDC is the only token that has fallen into the black list, while the other ERC -20 tokens did not get into it." Davidson also called Tornado Cash one of the reasons why USDC whales in recent months drop a stable token.