Transfers on USDC exceed USDT 5 times more after FTX crash

Key points: 

• Since CZ's tweet on liquidating FTX assets, USDC has been the go-to choice for crypto users, with an average daily transfer volume of $12.5 billion more than USDT.
• The USDT's peg to the dollar was briefly lost following the FTX collapse, this was attributed to fears of exposure to Alameda Research and FTX, which Tether denied.
• Supporters of USDC cite its assets, which are backed by cash or short-term US treasuries and are audited by Grant Thornton every month.
• Tether has been criticized over several years for not providing a proper audit and being less transparent about its reserves.
• Tether referred to the increase in market value from $8.79 billion to $61.82 billion, as evidence of the market's continued faith and confidence in USDT. 

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Stablecoin USD Coin has soared in popularity since the FTX crash. Today, its daily transfer volume is typically four to five times that of its main competitor, Tether, according to blockchain analytics firm Glassnode.

This is despite the fact that USDT’s market cap is $23 billion higher than USDC’s. On January 10, the spread was four and a half times in favor of USDC.

Both stablecoins saw a spike in transfers following Binance CEO Changpeng Zhao’s infamous tweet on Nov. 6 announcing that Binance would be liquidating its entire holdings of FTX tokens. FTX soon went out of business.

Since then, USDC has been the go-to choice for crypto users, with an average daily transfer volume of $12.5 billion more than USDT, according to Glassnode data.

Total transfer volumes for USDC (In blue) and USDT (In green). Source - Glassnode.

Each cryptocurrency is intended to trade as close to one dollar as possible, however, USDC is considered to have a safer option by some in the crypto community.

Supporters of USDC cite its assets, which are backed by cash or short-term US treasuries and are audited by Grant Thornton every month.

Tether has been criticized over several years for not providing a proper audit and being less transparent about its reserves.

The company that developed USDT was fined $41 million by the CFTC in October of 2021, the commission accused it of holding insufficient reserves 27.6% of the time between 2016 and 2018 despite claiming its tokens were fully backed by fiat currencies.

Tether has been decreasing the amount of commercial paper used to back its tokens in favor of safer alternatives, the most recent data shows that $46 billion of its reserves are cash, bank deposits, and U.S. treasuries.

The USDT's peg to the dollar was briefly lost following the FTX collapse, this was attributed to fears of exposure to Alameda Research and FTX, which Tether denied.

On-chain evidence suggests that the two companies were attempting to short the cryptocurrency stablecoin.

USDT's volume was higher than USDDC's until May 2021, after Tether increased the supply of the token from $8.79 billion to $61.82 billion, this represented an increase of 603%.

Market cap of USDT. Source - TradingView

Despite the subsequent shift in consumer preferences, Tether referred to the increase in market value as evidence of the market's continued faith and confidence in Tether. Every token could be exchanged for U.S. dollars on a 1:1 basis.