USDC: Indicator analysis in the stablecoin war
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Circle [USDC] has announced that they will be adding several chains to their network. In an official statement released during the Converge 2022 event, the fintech company announced that it will be adding five blockchains to the USDC ecosystem.
Interestingly, these new chains include layer one (L1) and mostly layer two (L2) protocols. Multi-chain extensions include Near Protocol [NEAR], Cosmos [ATOM], Optimism [OP], Polkadot [DOT], and Arbitirum.
However, the constant question of the crypto community will be whether this expansion can be important to rescue the current challenges facing stablecoins.
Should give a concluded USDC here?
After the upgrade, there is no clear indication that USDC can resume its quest to overthrow Tether [USDT]. Taking into account market capitalization, USDC is still behind USDT with a difference of $19 million.
At press time, data from Glassnode shows that USDC's market cap is still in a downtrend at $48.04 billion.
According to CoinMarketCap, a look at the price of USDC shows it holding steady at $0.9999. At the current price, it could mean that it has weathered previous difficulties. However, it seems too early to assume that the integration has no effect.
For USDC, each chain will have their role. Arbitrum, meanwhile, will make transactions cheaper and faster, while Cosmos will offer better security.
With several chains involved in smart contract implementations, USDC's performance on that front is unlikely to drop significantly.
In fact, it has increased slightly in the past 24 hours. According to data from Glassnode, USDC smart contract supply market share increased from 40.41% to 40.64%.
USDC has held steady
Moreover, it seems like it would be a disaster to wipe out USDC in the stablecoin wars. This is because 24-hour active addresses in the USDC ecosystem have improved significantly since the September 27 incident.
Also, at press time, active addresses have increased from 13,900 to 16,100 on the day mentioned above.
It is also a situation almost similar to the cycle of a day. According to analytics firm Santiment, the amount of USDC in circulation in a day is 1.47 billion. Although there is a slight reduction, it is barely vivid.
Despite this, USDC holdings on the exchange have declined as it seems that investors prefer to hold alternatives. At press time, USDC trade inflows were 7.82 million, while outflows were more than three times higher at 25.24 million.
Sep 30, 2022