🔥 Stable coin Landscape Changed Drastically In 2023
In this analysis I want to shed some lights on the top 3 biggest stable coins and how their relationships changed in 2023.
First of all, it's natural for stable coin marketcaps to decrease during bear markets. Investors are leaving the space and exchange their stables for fiat. This is something we've seen for the better part of 2022.
However, things changed in 2023.
- 13th of Feb: Binance and PAXOS (the issuer of BUSD) got hit by the SEC (U.S. Securities and Exchange Commission), which led to no more BUSD being minted. In turn, this has led to BUSD holders to convert their stables to both USDT and USDC, which saw a significant up tick in their marketcap. Basically, BUSD is a dead coin at the moment and will inevitably go to a marketcap of zero.
- 10th of March: USDC depegged from
1 during the depths of the banking crisis because it had funds in SVB. USDC quickly repegged, but trust has been damaged to such an extent that investors dumped their USDC and moved to USDT.
In the end, I think that USDT is the big 'winner' of the stables. It was the first, the biggest and apparently the safest. In my eyes, there's little reason to have any other stable than USDT, since it has clearly shown resilience over other big stables. In addition, I think that the market will gradually move towards having only 1 stable coin, it being USDT.
What is your preferred stable coin, and why? Share your thoughts 🙏
First of all, it's natural for stable coin marketcaps to decrease during bear markets. Investors are leaving the space and exchange their stables for fiat. This is something we've seen for the better part of 2022.
However, things changed in 2023.
- 13th of Feb: Binance and PAXOS (the issuer of BUSD) got hit by the SEC (U.S. Securities and Exchange Commission), which led to no more BUSD being minted. In turn, this has led to BUSD holders to convert their stables to both USDT and USDC, which saw a significant up tick in their marketcap. Basically, BUSD is a dead coin at the moment and will inevitably go to a marketcap of zero.
- 10th of March: USDC depegged from
1 during the depths of the banking crisis because it had funds in SVB. USDC quickly repegged, but trust has been damaged to such an extent that investors dumped their USDC and moved to USDT.In the end, I think that USDT is the big 'winner' of the stables. It was the first, the biggest and apparently the safest. In my eyes, there's little reason to have any other stable than USDT, since it has clearly shown resilience over other big stables. In addition, I think that the market will gradually move towards having only 1 stable coin, it being USDT.
What is your preferred stable coin, and why? Share your thoughts 🙏
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