USDC Dethrones USDT as the Most Liquid Stablecoin

According to Kaiko, a crypto market data provider, USD Coin (USDC) holds the title for the most liquid stablecoin on centralized exchanges (CEXs). The analysis revealed that around $38 million worth of bids are in place, ensuring that the price of USDC deviates by no more than 0.1%.

Following USDC, other stablecoins such as Tether (USDT), Binance USD (BUSD), True USD (TUSD), and Dai (DAI) also exhibit notable liquidity. The data compiled by Kaiko includes the depth of bids that maintain a 0.1% price deviation across all markets where USDC serves as a base asset.

“Theoretically, stablecoin issuers maintain their peg. However, de-pegging can still happen on spot markets, especially considering #USDT redemptions start at $100k. Stablecoin spot markets are thus extremely important for price discovery. This data aggregates .1% bid-side market depth across all markets that include the stablecoin as a base asset,” Kaiko said.

This recent development holds significance for USD Coin (USDC), as historically, Tether (USDT) has been the dominant stablecoin. At the beginning of the year, USDC and DAI had limited usage on centralized exchanges (CEXs) and were primarily traded within the decentralized finance (DeFi) ecosystem, as reported by Kaiko.

Related: What is Tether (1 USDT)? How does it work?

However, towards the end of the first quarter of 2023, a potential banking crisis in the United States caused USDC to lose its peg to the dollar and experience a 13% decline, dropping below $0.88. Nevertheless, USDC has since regained stability and is striving to maintain a price range of $1, as indicated by data from CoinMarketCap. During the same period, Tether (USDT), which is now the second most liquid stablecoin on centralized exchanges with approximately $26 million worth of bids, experienced trading below the $1 price range throughout the week.

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