USDC Outflows Exceed $10B as Investors Flee to USDT

USDC stablecoin has seen significant outflows, while Tether’s USDT market share has reached a 22-month high.

A man with a beard wearing glasses with blue Tether logo.
  • USDC stablecoin has experienced significant outflows following the closure of its key reserve banking partner Silicon Valley Bank in March.
  • Circle has backed the stablecoin’s value with short-term government bonds administered by BlackRock.
  • USDT has surged in popularity and market cap as investors have fled to it from other stablecoins.

Circle’s USD coin (USDC) stablecoin has seen a significant outflow of investors, with many of them shifting to Tether (USDT), which has reached a 22-month high in market share. Since March 10, when regulators closed down reserve banking partner Silicon Valley Bank, USDC token net outflows have surpassed $10 billion. 

USDC Market Cap Slumps 23% Following SVB Collapse 

USDC is the second-largest stablecoin with a market capitalization of $33 billion, backed by short-term government bonds administered by BlackRock and cash reserves at various U.S. banks. USDC outflows surged following SVB’s collapse, locking $3.3 billion of cash reserve deposits in its vaults for days until government intervention. This event caused USDC to lose its peg temporarily.


Circle has regained its dollar price peg following the collapse of its banking partner. However, the token has failed to recover its former market capitalization of $43 billion, having dropped by 23%. This slump for USDC has occurred amidst the severe testing of the stablecoin sector due to uncertainties in the banking sector and increasing regulatory scrutiny. 

USDC market capitalization in March

USDC market capitalization in March. Source: CoinMarketCap

Tether’s Dominance Increases as USDT Holds 60% Stablecoin Market Share

The stablecoin market has been in the middle of a major reshuffling since February when New York regulators told stablecoin issuer Paxos to stop minting Binance USD (BUSD), the third-largest stablecoin. USDT’s market capitalization has grown $8 billion from $71.5 billion to $79.5 billion since March 10, with TUSD also gaining prominence as one of the alternatives to BUSD. 


USDT has benefited from the slump in both BUSD and USDC, as investors have been fleeing these stablecoins and moving towards Tether. USDT has seen a rise in its market share, becoming the largest stablecoin in the market with a market capitalization of $79.6 billion, holding a 60% market share among stablecoins, according to DefiLlama. USDT is a key piece of infrastructure of the crypto ecosystem and is widely used for facilitating trading on exchanges. 

USDT market capitalization in March

USDT market capitalization in March. Source: CoinMarketCap

On the Flipside

  • The stablecoin market is highly competitive and constantly evolving, as market dominance can shift rapidly based on various factors such as regulatory changes, market sentiment, and technological innovation.
  • The stablecoin market is closely linked to the broader cryptocurrency market, known for its volatility and unpredictability. A significant market downturn could shake up the stablecoin market and lead to a reconfiguration of market dominance.

Why You Should Care

The recent outflows from USDC and the rise of Tether’s USDT in the stablecoin market highlights the importance of transparency and regulatory compliance in the crypto industry. 

This trend not only impacts USDT and USDC, but also other stablecoins and the crypto market as a whole. As stablecoins are essential for facilitating trading on exchanges, their stability and reliability are crucial for the health of the entire crypto ecosystem.

Read about how XRP‘s potential classification as a commodity could impact Ripple’s legal case against the SEC:

SEC, Ripple and Commodities: XRP Gains 15% Amid Speculation

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.