USDT - De-peg fears and how things are now

Assets covered: USDT, USDC, UST

Metrics used: Price, Marketcap, Stablecoins overview, Supply distribution



USDT price - Sanbase

So following the collapse of UST, FUD on USDT began popping up and there was a huge redemption of USDT over the past week (as observed from the marketcap of USDT shrinking).

Since then, around $7B USDT was redeemed for USD.

Now, FUD around USDT de-pegging isn't something new and often happens at the worst time possible (e.g when prices are dumping hard or some other coin depegs). Nothing really new here, as it's being debunked once again.

Panic sellers of USDT sold even as low as 0.95, smart money used that opportunity to net a nice profit since 1 USDT is easily redeemable for $1 USD. Nice profit day for those in the know, which likely explains why there was huge redemptions happening following the dip.

USDT is now back up at $0.998.

Stablecoins overview

Stablecoins overview - Sanbase

There seems to be a flight to safety from USDT to USDC as we can observe the drop in USDT's marketcap and rise in USDC's marketcap.

You can check out our stablecoin overview here.

To get a clearer picture of the inverse correlation between USDC and USDT during this period, here's how it looks:

USDT vs USDC marketcap - Sanbase

It can also be observed by how much of a difference with the transaction activity going on between the stablecoins.

USDC transactional activity - Sanbase

USDC is leading by heaps lately, likely driven by exodus of UST to USDC, USDT to USDC, or anything to USDC really.

Network growth

UST and flight to safety - Sanbase

Network growth in USDT and USDC suggests that on the first sign of UST de-pegging, retail folks started to convert whatever UST is possible to either USDT or USDC, the industry's two most reliable stablecoins.

Network growth has since slowed down as UST is pretty much worthless now, looks like majority of the people that wanted out, are already out, albeit taking huge losses.

Supply distribution

USDT supply distribution - Sanbase

While Network Growth for USDT has risen sharply during the UST collapse, we can observe via supply distribution by no. of addresses that a lot of wallets have stopped holding USDT altogether.

On the USDC side, it's quite interesting to see the inverse co-relation of wallets in action.

USDC supply distribution

However, it's surprising to see the $1,000-$10,000 (retail category) cohort dropping, naturally you'd think that the same USDT cohort would've transferred over.

Could this be a sign of retail cashing out ?

Thanks for reading!

If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!


Conversations (0)

No comments yet
Be the first to comment