USD Coin on the Rise

GB Market Commentary 16/11/2022

by William Morris

Polkadot has seen its active users rise 300% over the past two weeks, with daily new accounts rising almost 10x. Polkadot allows users to launch and operate their own blockchain on top of the Polkadot blockchain. According to a Messari report in Q4 of 2022 Polkadot was the most commonly held altcoin among VCs and Hedge Funds, with 42% of tracked institutions holding an investment in DOT. https://twitter.com/dotinsights_xyz/status/1592115353395810304

Circle has announced that Apple has enabled crypto payments for their Stablecoin USDC. Merchants who are willing to accept USDC will now be able to do so through Apple pay. Circle has gone from strength to strength following a $400m investment in April this year, from the likes of BlackRock and Fidelity, and is now largely viewed as the industry standard Stablecoin issuer. Circle has projected revenues of $438m in 2022 and expects $2.2bn in 2023. Nevertheless, USDT still dwarfs USDC in terms of daily trading volume. As per data from the end of September 2022, an average of $45bn worth of USDT is traded daily in comparison to USDC’s $4bn. USDC is, however, rapidly eroding USDT’s dominance in terms of market cap – as USDC is further integrated into the trading ecosystem, we may expect this dominance to shift.

In the current context of the Global Financial ecosystem, I think it is worth noting that USDT has been trading off its peg with the USD for over a week now. As well as trading almost 6% off the USD peg in May this year. Almost 70% of Tether reserves are denominated in US Treasury Bills which have seen a dramatic sell-off in 2022. While US Treasury’s have recovered recently, Tether will surely be feeling further pain as a result of this.

The FTX hacker is now the 35th largest holder of ETH – holding around $288m. Dylan LeClair highlighted an interesting question relating to this on Twitter below. One day after FTX filed for Chapter 11 Bankruptcy its wallets were drained for more than $663m in various crypto assets. https://twitter.com/DylanLeClair_/status/1592704134163357696.