- USDC is the victim of much of the same FUD (Fear, Uncertainty, and Doubt) that plagued BUSD recently.
- We saw an initial spike in USDC volume on Binance Smart Chain around February 12.
Stablecoins are in the crosshairs of the latest regulatory FUD. BUSD was the hardest hit stablecoin in that regard and others managed to stay unaffected. from the point of view of things USDC The next victim is just around the corner and the worst is not over yet.
Recent regulatory pressure has forced many cryptocurrency companies to reevaluate their strategies in the US and among them is Binance, which is rumored to end its ties with US-based companies, including the issuing company from USDC, Circle.
When the rumors have been dispelledOne can easily imagine how such an outcome would have prevented USDC from reaching large volumes in the US market.
CZ responded that this is fake news, that blockchains have no borders (it’s hard to tell what a US currency is).
– Wu Blockchain (@WuBlockchain) February 17, 2023
But has the danger really passed? From a regulatory perspective, Circle, the company behind USDC, is regulated and audited in the United States. This means that USDC itself is less at risk of being sidelined due to regulatory pressure.
Calculation of USDC volume under current conditions
It may be interesting to see how current market conditions have affected USDC demand and volume thus far. We saw an initial spike in USDC volume on Binance Smart Chain around February 12 before peaking on February 16.
One of the possible reasons for this is the increase in demand from the crypto market in general, hence the increase in demand for stablecoins as trading volumes increase.
However, USDC volume on BSC fell significantly on Friday and Saturday (Feb 17-18). The main reason for this is likely fud binance who affected Bus before falling to the USDC for the most part.
A similarity is seen with USDC volume on the Ethereum network, whose volume also peaked on February 16 before plunging in the past two days.
This confirms that traders are abandoning USDC in favor of other stablecoins despite FUD attempts, not an isolated scenario.
The above result shows that Binance FUD had no effect on USDC volume or demand. Instead, volumes were largely driven by prevailing market conditions. Additionally, the USDC market capitalization has seen a reversal in recent days.
That being said, the USDC was in an overall downtrend prior to the recent pivot on February 13. This reflects well on his health despite the growing concerns.