Crypto Whales Are Dumping USDC, Here’s Why
According to a crypto trader, the second-largest stablecoin, USDC, is in major trouble. The Fed’s hawkish stance has resulted in a sell-off in the entire crypto market. However, according to Geralt Davidson, Circle’s stablecoin is rapidly losing ground. Moreover, there is a significant slide in the stablecoin’s market cap with no sign of a recovery.
USD Coin is a stablecoin issued by Circle, which is the second-largest stablecoin by market cap. Its market cap has fallen below $50 billion.
Why USDC May Be In Trouble
Geralt Davidson highlights how the USDC supply held by the top 1% of address have steadily decreased. It highlights that the whales are dumping their USD Coins. According to Davidson, the Tornado Cash decision was a bad moment for the company. The Office of Foreign Assets Control of the US Treasury sanctioned Tornado Cash for money laundering activities. Circle, the parent company of USDC, froze all its tokens on Tornado Cash.
Unlike Circle, companies like Tether did not freeze USDT on Tornado Cash addresses. According to Davidson, this decision by Circle has led to a lack of trust in the organization.
USDC’s volume on exchanges was very close to the volume of USDT in the February of 2022. Some experts believed that USDC is set to dethrone USDT as the top stablecoin by October 10th, 2022. However, currently, the second largest stablecoin is nowhere close to competing with USDT. USDT’s market cap currently stands close to $68 billion while USDC’s stands at $49.7 billion.
Recently, USD Coin suffered a major blow as Binance delisted USDC from its platform and stopped its deposit. Instead, the platform offered to convert its users’ USD Coin to BUSD in a 1:1 ratio. India’s largest crypto exchange, WazirX, followed Binance in delisting USDC.
With the Fed continuing to opt for hawkish measures, the lack of trust in USDC can be trouble for the stablecoin.
Will Circle Support CBDCs?
The compliance by USDC in the Tornado Cash has led critics to state that USDC will support Central Bank Digital Currencies. Santiago Velez, the co-founder of Block Digital, has similar views. Moreover, he believes that there is no way that FDIC, Federal Reserve, and OCC will give any competitive advantage to the USD Coin without the support of CBDCs.
- Michael Saylor Says “No New Orange Dots” Pausing Bitcoin Buys as Holdings Hit Record $79B
- Experts Turn Bullish on Pudgy Penguins as PENGU Leads Meme Coin Buys on Solana
- ASTER to Launch Phase 2 Airdrop on October 10 as Open Interest Tops $5B in Two Weeks
- El Salvador’s Bitcoin Holdings Hit $475M Profit as BTC Becomes World’s 7th Largest Asset
- Breaking: Bitcoin Hits New ATH Above $125k as ‘Uptober’ Kicks Off in Full Force
- Dogecoin Price Rebounds 15% From Buy Zone as Whales Add 30M DOGE – Can Bulls Push Beyond $0.30?
- FLOKI Price Prediction as ETP Listing Drives Adoption—Is a 160% Rally Ahead?
- BNB Coin Price Hits ATH as Derivatives Activity Soars—Is $1,520 the Next Stop?
- Aster Price Eyes $3 After Channel Breakout as Open Interest Surges to $1.37B
- Will XRP Price Hit $5 if the SEC Approves ETFs This Month?
- Bitcoin Price Hits $120K Ahead of Q4 — Can Citigroup’s Forecast Hold Up?
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
