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After the USDC crisis, the stablecoin market has undergone significant changes: the trust level in fiat stablecoins remains high, while the inventory at exchanges has decreased dramatically.
Analysis of the Stablecoin Market After the USDC Crisis: Decreased Purchasing Power, High Trust in Fiat Stablecoins
Recently, the collapse of a partner bank has led to a liquidity crisis for the USD stablecoin USDC. Data shows that USDC's price dropped to a low of 0.8788 USD on March 11, with a daily decline of over 12%. This de-pegging event has also affected other stablecoins that use USDC as collateral, such as DAI and FRAX.
Although the crisis of USDC was alleviated on March 13, this event has brought many changes and reflections to the stablecoin market as one of the previously most trusted stablecoins. After analyzing the stablecoin market data from March 11 to 18, it was found that:
The average market value of fiat stablecoins has risen across the board, while the average market value of crypto-based stablecoins has fallen across the board, indicating that the market's confidence in fiat stablecoins remains strong.
The current market value of USDC is about 47% of USDT. TUSD's market value has increased by over 54%, the largest increase. The market values of various stablecoins such as USDT, DAI, and LUSD have also seen growth.
On March 18, the exchange's stablecoin inventory was approximately $21.461 billion, down 11.02% from the 11th, with a rapid outflow of funds.
The total locked amount of major stablecoins in Uniswapv3, Curve, and AAVE v2 fell from 3.464 billion USD on the 11th to 3.297 billion USD on the 18th, a decrease of approximately 4.83%.
On March 11, the total trading volume of stablecoin pairs on the DEX reached $23.17 billion, far exceeding the average daily level at the beginning of the month. The trading between USDC, USDT, and DAI constituted the main liquidity path for stablecoins in DeFi during the crisis.
Analysis of Stablecoin Market Capitalization Changes
The depegging of USDC has had a significant impact on the market value of various stablecoins. On March 11, compared to March 10, the market value of USDC fell by 2.5%, while the declines in the market values of stablecoins such as SUSD, DOLA, MAI, and USTC were even greater, ranging from 2.8% to 5.0%. Meanwhile, certain stablecoins like USDP, DAI, and FLEXUSD actually saw an increase in market value.
As of March 18, the market value trends of most stablecoins are similar to those on the 11th. TUSD had the highest increase in market value, exceeding 54%, while USDT also rose over 6%. However, the market values of USDC, BUSD, MIM, and other 7 stablecoins continued to decline, with MIM having the highest drop of over 17% and USDC dropping over 14%.
From the perspective of stablecoin types, the average market capitalization of 6 fiat stablecoins shows an upward trend in both time periods, with average increases of 1.83% and 2.41%, respectively. This indicates that the market's confidence in fiat stablecoins remains strong. In contrast, the average market capitalization of 9 crypto asset-backed stablecoins has declined overall, with average decreases of 0.74% and 1.42%, respectively.
Algorithmic stablecoins have shown a certain degree of resilience during this crisis. Although the average market value dropped by 1.26% on the 11th compared to the 10th, it increased by an average of 2.82% on the 18th compared to the 11th, marking the largest increase.
Stablecoin Market Landscape
There are currently over 100 types of stablecoins on the market, with a total market value of approximately $133.88 billion. USDT remains the market leader, with a market value of about $76.74 billion, followed by USDC, which has a market value of approximately $36.03 billion. Together, they account for 85% of the total market value of stablecoins. After the crisis, the market value of USDC is only 47% of that of USDT.
In addition to USDT and USDC, stablecoins with a market capitalization exceeding $1 billion also include BUSD, DAI, TUSD, and FRAX. Those with a market capitalization exceeding $100 million include USDP, USDD, GUSD, LUSD, USTC, MIM, and SUSD.
From the perspective of stablecoin types, major stablecoins are divided into fiat stablecoins, crypto-asset-backed stablecoins, algorithmic stablecoins, and hybrid stablecoins. The highest market capitalization is still held by fiat stablecoins, but the most numerous are crypto-asset collateralized stablecoins.
It is worth noting that, in addition to Ethereum, other public chains such as Tron, Optimism, Polygon, and Kava have also seen the emergence of stablecoins with large market capitalizations, which has positive implications for the development of DeFi on these public chains.
Changes in Exchange Supply and Purchasing Power
On March 18, the exchange's stablecoin supply was approximately 21.461 billion USD, down 11.02% from the 11th, with a rapid outflow of funds. Interestingly, the stablecoin supply on the 11th increased by 3.49% compared to the 10th, which may be related to users exchanging for stablecoins to hedge against risks.
The stablecoin supply index ( SSR ) is also affected. As of March 18, the SSR is approximately 4, an increase of about 30% compared to 3.08 on the 11th. This is related to the recent rebound in BTC prices. In the context of a rapid short-term rise in asset prices while the overall market capitalization of stablecoins declines, the SSR shows a slight increase, indicating a decrease in actual purchasing power.
Stablecoin Liquidity in DeFi
During the crisis, the total locked amount of 13 major stablecoins in Uniswap v3, Curve, and AAVE v2 dropped from 3.464 billion USD on the 11th to 3.297 billion USD on the 18th, a decrease of approximately 4.83%. Among them, the locked amount of USDT in these three protocols saw a significant increase, while the locked amount of USDC declined in both Uniswap v3 and Curve.
On March 11, the total trading volume of stablecoin trading pairs in the DEX reached 23.17 billion USD, far exceeding the level at the beginning of the month. The trading among USDC, USDT, and DAI constituted the main liquidity path for stablecoins in DeFi during the crisis.
In the lending market, the lending rates for USDC and DAI show a "V" shape, while the lending rates for USDT, TUSD, GUSD, LUSD, and SUSD show an "Λ" shape. Currently, the lending rates in the lending market have returned to the levels seen at the beginning of the month.
Overall, this crisis highlights the importance of stablecoins as a bridge between the crypto world and fiat. Although regulated USD stablecoins may become a weak point in the system, their ability to withstand risks is also relatively strong. This is why users maintain confidence in regulated fiat stablecoins, and it is also why stablecoins are receiving increasing regulatory attention.