Post UST’s depegging fiasco, data seems to suggest returning interest in stablecoins


Stablecoins, in general, suffered immensely post the TerraUSD (UST) de-pegging event. This event saw UST drop from its once-stable $1 parity to today’s $0.06 per UST. Now, to refill that lost trust, the second largest stablecoin (USDC) provider Circle has taken some measures.

Circle published a blog post on 13 May, called ‘How to Be Stable’. This post incorporated Circle’s efforts around trust and transparency with USDC.

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Have some faith 

Well, cryptocurrency exchanges did showcase some faith in the 2nd largest stablecoin within the ecosystem. The Crypto Exchange OKX announced the listing of LUNA/USDC, SOL/USDC, DOGE/USDC, FIL/USDC, DOT/USDC, NEAR/USDC, APE/USDC, AVAX/USDC, ADA/USDC, and SHIB/USDC on spot trading markets. Ergo, continuing to support the development of the USDC ecosystem.

Jeremy Allaire, the Chief Executive of Circle acknowledged this development in a tweet on 23 May that read:

“Flight to quality and safety expressed in spot markets on top exchanges. More to come soon!!”

Such narratives could play a vital role in providing some certainty amidst the chaos. Well, it did seem to work as the trading volume surged by more than 24% in the past week. In addition to maintain transparency, Allaire further promised weekly USDC reserves and liquidity operation reports.

“As promised a week ago, we are now providing weekly reports on USDC reserves and liquidity operations,” Allaire tweeted. Allaire also shared the USDC assurance report and further said: “Over the past week, we saw 8.6 billion USDC issued, and 6.3 billion USDC redeemed, with a net weekly increase in circulation of 2.3 billion USDC.” The Circle’s CEO further added:

“What makes USDC such a great product is that it’s easy to create and redeem, with seamless integration with the existing global banking system. As a result, customers are able to use it as a very efficient pipe between legacy electronic dollars and digital currency dollars.”

Having said that, consider the timing of this news; the 2018 “ICO era” scam wallet activated as developers tried to withdraw $22 million in USDC.

Any repercussions? 

Well, not at least in the short-term. Here are a few bullish signs. The Exchange Net Flow reached an ATL of -$20,349,225.13. Ergo, signalling a bullish shift in investor sentiment. The previous ATL of -$17,229,420.56 was observed on 27 April 2022.

Source: Glassnode

Consistent outflows would represent strong holding sentiment and take out circulating supply from the market. Moreover, the number of addresses with a non-zero balance witnessed a surge as well.

Source: Glassnode

 

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